How Will Traditional Automakers Transition To Electric Vehicles?
Every transition is hard and, usually, expensive. The automotive industry is no different.
Even with producers of electric-only vehicles, like Tesla, Inc. (NASDAQ: TSLA), Neuron EV and Chinese company Nio Inc (NYSE: NIO), the majority of future electric vehicles should come from the existing big automakers, which will have to switch from their current combustion engine models. And they are already doing so by introducing new electric models, electric alternatives of current models, and big plans for future electric vehicle production.
Ford Motor Company (NYSE: F) and General Motors Company (NYSE: GM) make the vast majority of their sales from trucks and SUVs. That percentage is 82% today, and it is expected to grow to 87% by 2026.
This isn't a new trend. Ford's F-150 has been the top-selling model in the U.S. for many years. As a result, in spite of the plan to aim for emission-free electric cars, sales of trucks and SUVs will likely keep growing to more than 5 million units (SUVs and pickup trucks) in 2026.
On the other hand, their production of EVs will also grow, and the two automakers expect to sell approximately 320,000 EV units in 2026. This number may not look impressive, but it is 10 times more than these companies plan to deliver in 2020 (though it is still fewer than the 367,500 units that Tesla delivered in 2019).
Things Standing In The Way Of More Electric Vehicles
The current oil price war between Russia and Saudi Arabia has resulted in an extreme drop in gasoline prices, in some areas lower than< $2 per gallon. This has resulted in a bit of a shock to the electric vehicle market, as one of their keyadvantages has been much cheaper energy costs.
Also, the coronavirus pandemic has forced many countries to switch their focus to basic needs like consumer staples, food, obtaining medical equipment like ventilators and other medical supplies. Because of this, companies like Piedmont Lithium Limited (NASDAQ: PLL) are expecting that their projects in the U.S. related to the production of lithium and other elements, materials, and high-tech equipment necessary for electric vehicles will face a year or two of delays.
We still have to wait and see what kind of relief measures may be passed by the U.S. government to help stimulate the EV and renewable energy industries. In the meantime, players in this industry will have to cope with the crisis the world's economy is currently in, just like everybody else.
This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you're interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be sent to ivana@iamnewswire.com
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