Electric Vehicles Primed for Takeoff in the U.S., Major Automakers Plot Course
The U.S. is expected to see a 12% to 15% penetration of electric vehicles (EV) in its automotive market by 2030, according to PricewaterhouseCoopers (Pwc) (London, England). General Motors Company (NYSE:GM) (Detroit, Michigan), Ford Motor Company (NYSE:F) (Dearborn, Michigan) and other major auto manufacturers have plans to make personal EVs a significant part of their futures. Industrial Info is tracking nine active EV-related projects, worth $1.29 billion, in North America.
The adoption of EVs will be driven largely by two factors: vehicle economics and charging infrastructure. Consumers are likely to be motivated by the cost of ownership; regulations such as fuel economy standards; and familiarity with charging, in their decision to make the switch from conventional internal combustion engines. Charging infrastructure plays a large role, considering adequate availability would alleviate consumers' fears regarding how far they can drive before reaching the next charging station. Pwc expects 80% of charging to occur at home overnight, as opposed to at work, in public or out on the road.
Charging technology is broken out into four levels: Level 1, the slowest type of charging that is standard on all EV models, has a charge time of about 20 hours from empty to full. Level 2 requires equipment installation, and is typically seen in public charging; this takes five to six hours for a full charge.
Levels 3 and 4 applies to DC fast charging, along the highway for example, that takes about 20-30 minutes from empty. However, not all vehicles are compatible with this technology. And due to the expense and electric current requirements, home installation is not practical.
But the current charging infrastructure provides insufficient support for the transition to EVs, according to the International Council on Clean Transportation (Washington D.C.). Deployment of charging stations is ongoing but uneven, and the infrastructure is leanest in many markets where EV adoption is expected to grow most rapidly, including cities in California, Boston, New York, Portland, Denver and Washington D.C.
Current market penetration is largely limited to low-volume models and early adopters. The tipping point for adoption in the U.S. could come by 2024-2026, when the total cost of ownership is projected to be in line with gas-powered vehicles. Original equipment manufacturers (OEM) plan to introduce more than 70 EV models by 2027.
Other stakeholders are investing in the EV ecosystem, including retail partners (parking), fleet managers (car rental and sharing) and government (urban planning), among others.
The current focus of commercial production is on trucks and cargo vans for shippers, such as Amazon.com Incorporated (NASDAQ:AMZN) (Seattle, Washington), United Parcel Service Incorporated (NYSE:UPS) (UPS) and FedEx Corporation (NYSE:FDX) (Memphis, Tennessee). The U.S. Postal Service recently announced it plans to add up to 165,000 fuel-efficient or electric cars to its fleet over the next 10 years; the first Next Generation Delivery Vehicles (NGDV) are expected to launch by 2023. It is not just the commercial side gaining traction, however, as major auto manufacturers are looking toward a future full of personal EVs.
General Motors plans to end production of all diesel- and gasoline-powered cars, trucks and SUVs, and convert its entire fleet to EVs, by 2035. The company will spend $27 billion on electric and self-driving vehicles through 2025, releasing 30 new EVs worldwide in that time.
Ford stated in its fourth-quarter earnings report that it will double the previously pledged capital spend for electric and self-driving vehicles through 2025, to $22 billion. The new, all-electric compact SUV, the Mustang Mach-E, launched in fourth-quarter 2020, to be followed by the E-Transit cargo van in late 2021 and an all-electric F-150 pickup truck in mid-2022.
Meanwhile, Kia Motors (Seoul, South Korea) plans to make 11 EV models available by 2026 -- a year earlier than previously announced -- seven of which will be built on parent company Hyundai Motor Group's (Seoul, South Korea) E-GMP platform. Kia wants EVs, hybrids and plug-in hybrids to make up 40% of sales by 2030.
Active EV Projects in North America
Mullen Technologies (Brea, California) plans to kick off construction in August of an $80 million grassroot EV plant near Spokane, Washington. The first phase of a 1.3 million-square-foot facility, the 500,000-square-foot plant will manufacture Qiantu Motors' (Suzhou, China) Qiantu K50 electric sports car; completion is expected in October 2022. The Phase II expansion is expected to kick off in January 2022, to increase production capacity and allow for lithium battery production. These projects have a medium probability (70-80%) of moving forward as planned. For more information, see Industrial Info's project report on Phase I and Phase II.
Samsung SDI America Incorporated, a subsidiary of Samsung Group (Seoul, South Korea), is winding down construction of a $62.7 million EV battery manufacturing plant renovation in Auburn Hills, Michigan, for high-volume manufacturing of rechargeable batteries. Completion is planned for April. For more information, see Industrial Info's project report.