The automotive industry is under pressure to reduce emissions, both from government regulations and from consumers who are growing more conscious about the environmental impact of their vehicles. Electrified powertrains are a promising avenue to reduce or eliminate vehicle emissions for automakers. According to Lux Research‘s report, The Electric Vehicle Inflection Tracker: 2020 Edition, most of automakers’ attention has been focused on making battery electric vehicles (BEVs) that are profitable while addressing consumer pain points related to charging speed and range.
“Consumers want to know, how far can this electric car go and what will it cost? Fortunately, BEVs are consistently making progress on how far they can go, with the average range now 230 miles. Since 2011, range has consistently increased, with a compound annual growth rate (CAGR) of 13.7%,” says Chris Robinson, senior analyst at Lux Research and lead author of the report.
“Prices have also gone down, with the average vehicle’s base manufacturer’s suggested retail price (MSRP) in 2019 at $33,901, down from $42,189 in 2016. These changes are making it easier for consumers to own an electric vehicle,” he adds.
Lux believes automakers should focus on their battery supply chain. Battery shortages have already caused some automakers to reduce their BEV production plans. To fix this issue, which will only be exacerbated over the next few years as more electric vehicles come to market, automakers should secure raw materials like cobalt and lithium for their future vehicles. Another key strategy is to balance platform flexibility against commitment. Large original equipment manufacturers (OEMs) can afford to develop dedicated BEV platforms that save money, but smaller OEMs need to remain flexible to avoid taking a large financial hit if BEV sales are slow.
Lux Research predicts that it will take until between 2035 and 2040 for electric vehicles to make up more than half of all vehicle sales. While adoption was tracking ahead of forecasts pre-COVID-19, Lux believes that impacts from the pandemic will only cause short-term setbacks.
To download the executive summary of Lux Research’s The Electric Vehicle Inflection Tracker: 2020 Edition report, click here.