While still making barely a sliver of the overall market pie, plug-in vehicle sales more than doubled during the first half of the year, outpacing the 29% rise for total vehicle sales, according to research firm Wards Intelligence. However, COVID-19 has distorted comparison figures as this time last year, the pandemic compared with last year, when the pandemic crushed sales with people across the globe being stuck at home.
It surely helped that rainfall of new EV models keeps on coming. Tesla Inc‘s (NASDAQ: TSLA), Ford Motor Co (NYSE: F), Volkswagen (OTC: VWAGY), and others did a great job to boost demand, despite significant technology-related setbacks. The automotive industry’s EV transformation has accelerated during the first half of the year even more than in 2020 that was named as the year an electric future became an actual thing, with sales of battery-powered vehicles growing faster than the broader U.S. car business.
Tesla Inc.’s continued dominance played a big part in these gains, as its Model Y crossover SUV quickly became a best seller since being introduced last year. More details on its further plans, including the Cybertruck, will be known after the close today as Tesla is scheduled to report second-quarter financial results.
Ford’s Mustang Mach-E SUV and Volkswagen’s ID.4 were also well received, boosting EV sales to over 3% of the total U.S. market in both May and June. According to industry data, this is the highest ever recorded. According to consulting firm AlixPartners LLP, automakers are collectively spending $330 billion over the next half of a decade to bring more plug-in models to the market.
General Motors Co. (NYSE: GM), Ford, and BMW AG (OTC: BMWYY) each are earmarking tens of billions of dollars on the transition during this decade, recently even rising their initial investment.
The Big Question
A big question mark looming over the car business is whether consumers are ready to buy them. Increasing the driving range and expanding the variety of vehicle body styles and price points help to boost the interest in battery-powered cars but hurdles remain, including high price tags, limited range, and perhaps the most challenging, the deficit of charging stations.
Regulatory Support
Carlos Tavares, chief executive of the world’s fourth-largest global automaker Stellantis (NYSE: STLA) said the pace at which drivers make the switch to electrics will depend on regulations and consumer awareness. The European government made its priority clear by proposing an effective ban of new fossil fuel cars from 2035, launching a bold green revolution. In the U.S. market, which lags behind Europe and China when it comes to EV adoption, electric-vehicle adoption, the Biden administration’s plans are supporting EV development with significant investment in charging infrastructure and consumer incentives.
EV News Keep On Coming
Stellantis which has Jeep, Ram, and other auto brands under its umbrella, recently joined other global automakers in revealing big investment plans, including four EV development platforms and the creation of its own battery plants.
Last Thursday, Mercedes-Benz (OTC: DMLRY) said it is preparing to sell only electrics by 2030 but it did not give an exact date of when it will stop producing ICE vehicles.
The bottom line is that the EV shift is picking up speed and the luxury segment is finally catching up as traditional automakers are expecting markets to switch to electric-only.
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