Author: Alwin Antony
We know for a fact that there is a race going on in the electrification of automobiles globally. But to win this EV race it takes a lot more than it requires to win a drag race.
Coming weeks, we are going to look at the ongoing EV race from different angles.
There are mainly three variations of this electrification race and they are,
- One among the companies to decide who will end up with greater market share
- One among the countries to decide who will have more adoption of EVs and provide better infrastructure to aid the Electrification revolution
- The last one is between the start-ups and the big boys in the industry as to who is likely to march ahead in the race
It might sound simple but believe me it is pretty hard to win this race. Particularly this week, we are going to discuss the companies involved in the race.
How to Win the EV Race – Blog Series
This is the first part of How to Win the EV Race blog series
- As An EV Maker, What Does It Take to Win the EV Race?
- What Does It Take To Win The EV Race As A Country?
- Who Has the Winning Edge in The Ongoing EV Race? The Oldtimers or The Startups
The Race Among The Automobile Manufacturers
The internal combustion engine (ICE) has powered our cars for over a century and is being gradually replaced by electric vehicles (EVs). To support the claim, consider this, fully electric vehicles made for 6.8% of new vehicle registrations in 42 major economies in 2021, an increase from 3.9% in 2020 and the trend is not going down.
As the world races towards sustainability, automobile companies are vying to win the EV race, not just for supremacy but also to shape the future of transportation.
Let us look at some of the key characteristics that could give the companies an edge over the competitors.
#1 Commitment to Sustainability
It might sound a bit shabby but the first point should be the Commitment to sustainability. As people are becoming more and more environmentally cautious, it will require something more than a green campaign or any such marketing gimmicks from the companies to catch the audience.
To win the EV race, an auto manufacturer must be firmly committed to sustainability. This entails reducing carbon emissions, conserving natural resources, and minimising environmental impact throughout the entire vehicle lifecycle.
Companies need to develop a clear sustainability roadmap that goes beyond electric drivetrains to encompass responsible sourcing of materials, recycling initiatives, and low-impact manufacturing processes.
Some notable examples of sustainability initiatives are Tesla’s Gigafactories. In their Gigafactories, they use renewable energy sources like solar and wind to power their manufacturing facilities which in turn reduces the carbon footprint associated with production.
Ford’s Sustainability Report is also noteworthy as Ford publishes annual sustainability reports outlining their efforts to reduce carbon emissions, use sustainable materials, and minimise waste throughout their operations.
#2 Cutting-Edge Technology & Eye Catching Designs
In the rapidly evolving EV market, staying ahead of the curve in terms of technology is crucial. Companies should invest heavily in research and development to create innovative and high-performance EVs. If we observe and assess how much the companies are investing in the R&D we can bet on their future in the new automobile landscape.
The research and design include developing cutting-edge battery technology to increase range and decrease charging times, as well as enhancing autonomous driving capabilities and connectivity features.
To quote some examples, up until less than a decade ago Korean automakers Kia and Hyundai were well-known for their cost-effective models. They have now turned the EV sector into a strategic fulcrum together with Hyundai’s Genesis brand for luxury EVs.
Designs like the Ioniq, EV6 from Hyundai and GV60 from Genesis challenge the typical form-factor grammar associated with contemporary car makers by proclaiming their electric drive train with strong and dramatic characteristics.
#3 Innovation Outside the Hood
The primary example of innovation outside the vehicle is Tesla’s Supercharger network as It allows for fast charging and has played a pivotal role in addressing range anxiety, making long-distance travel in electric vehicles more practical. Also, Rivian’s electric pickup truck features advanced technology such as Level 3 autonomous driving capabilities and a tank turn mode, showcasing the potential for innovation in EVs.
There is something peculiar about companies like Tesla and Rivian when it comes to innovation and I believe there are some solid reasons for that and we will discuss it thoroughly later.
Now let us look at another major factor in deciding a company’s position in the EV landscape
#4 Having A Wider & Affordable Product Range
To win the race, automakers must make EVs affordable and accessible to the masses. Because we know that the affordable little models sold in millions bring the cash flow to the companies rather than the posh high-end models sold in hundreds or thousands.
Affordably positioning their product range is very crucial for EV makers. This involves not only reducing the manufacturing costs of EVs but also investing in charging infrastructure and providing financial incentives to buyers. Offering a range of EV models at various price points ensures that more people can make the switch to electric and the companies can get access to a wider customer base and grab bigger market share.
For instance, the Nissan Leaf is a classic example. It was one of the first mass-market electric vehicles available at an affordable price point, making electric mobility accessible to a broader audience in Europe whereas Hyundai’s Kona Electric is known for offering a competitive range at an accessible price point, making it a popular choice for budget-conscious EV buyers in Asian countries.
Sometimes I wonder why Tesla has got many haters going around vandalising Teslas whenever and however… Ohh I got it. It might have something to do with the fact that They can’t afford a Tesla!!!
Now moving on to the next critical factor.
#5 Global Expansion and Partnerships
The global automakers are playing the game very well as we have mentioned in our earlier post. They have realised that winning the EV race requires a global perspective and requires synergy.
Companies must expand their market presence to reach consumers worldwide. Strategic partnerships with local governments, charging infrastructure providers, and renewable energy companies can facilitate market penetration. Collaborations with technology companies can also accelerate innovation in EV development and even shaking hands with your so-called ICE competitors may help you to get ahead in this EV race.
There are various driving factors behind this collaborative approach like the long duration to develop, test and deploy new technologies in-house or the scarcity of resources including money, men and machines not to mention the expertise in the field. All these attributes call for alliances between companies to get the most out of the electric revolution.
In some of the instances we could see where the synergy at play is,
- The Byton M-Byte was developed in Germany, engineered in Silicon Valley, and produced in China.
- Tesla designs and produces its products in the USA and China, and it has ambitious development and expansion goals.
- Hyundai made a $90 million investment in Croatian automaker Rimac just two years ago.
- The Honda Prologue is scheduled for 2024 and is anticipated to take the form of a small or mid-size SUV with General Motors EV powertrains.
- Hyundai and Grab, Asia’s top super app platform and ride-hailing service have announced an expansion of their current strategic cooperation in mobility services.
- In partnership with Yulon Motor, Foxconn has already created EV prototypes under the Foxtron name.
You got the picture right?…
Now, moving on to the next point in the list.
#6 Branding and Marketing
For many, the car they drive is not just a means of transportation. They see their vehicles as an embodiment of who they are and what they stand for. All the big brands have been milking their prospective buyers on this “philosophy” since the inception of car companies.
Thus for any automaker creating a strong brand image and marketing strategy is essential. Companies should promote the benefits of EVs, highlighting their environmental advantages, lower operating costs, and advanced technology. Successful branding can drive consumer interest and demand for their EV models.
Chevrolet’s “Real People, Not Actors” Campaign emphasised the affordability and everyday practicality of the Bolt EV, helping to attract a wider audience while Porsche Taycan’s “Soul, Electrified” marketing campaign focused on the brand’s heritage and the thrill of electric performance, reinforcing the idea that electric vehicles can be exciting and luxurious.
Here you can see how to create a powerful campaign to gather your target audience and place your product where it needs to be placed.
Let us look at another important decision-maker in the EV race.
#7 Being Customer Centric
Companies are launching EV models every month, but customer preference ultimately decides the winner of the race. The EV platform represents a shift to a new kind of mobility, but intense competition is inspiring innovative rethinking in every facet of the car-owning experience.
Who will win the race will only become clear with time. But we know that the winner will be the one with has most distinct vision and the most alluring set of features that customers desire or have yet to imagine.
Also, educating consumers about the benefits of EVs and providing exceptional customer support is paramount. Companies must dispel myths, address concerns about range anxiety, and offer comprehensive warranties and maintenance services to build trust and loyalty among EV owners.
Companies have identified the need for educating customers on their product and acted upon it. For example, Audi has opened Electric Vehicle Experience Centers in select locations, providing hands-on education and test drives to help consumers understand the benefits of EVs and BMW provides dedicated advisors to educate potential EV buyers about the advantages of electric vehicles, addressing their concerns and ensuring a positive purchasing experience.
#8 Being Able to Meet Regulatory Compliance
Compliance with evolving regulations and emission standards is non-negotiable. To win the EV race, companies must not only meet but also exceed these requirements. Proactive engagement with regulators and policymakers can help shape favourable policies that encourage EV adoption.
Here I would like to stress “Exceeding the current requirements” as it will be the number one factor in deciding your brand’s resale value. Since the regulations are becoming stringent day by day and if you fail to foresee the future requirements all your efforts will be in vain and your models will become obsolete in a year or two.
Companies like Volvo have made bold commitments to produce only electric vehicles by 2030, ahead of many regulatory mandates. The Renault ZOE complies with strict European emissions standards, allowing it to be sold in markets with stringent environmental regulations.
On to the next topic in the list.
#9 Having A Sustainable Supply Chain
Automakers should ensure that sustainability is not limited to the vehicle itself but extends to the entire supply chain. Ethical sourcing of materials, reduction of waste, and efforts to lower the carbon footprint of manufacturing processes are essential to winning the EV race.
On that note, BMW’s commitment to sustainability extends to its suppliers, where they encourage the use of clean energy and eco-friendly manufacturing processes in the production of components. Also, Ford is investing in sustainable materials like recycled plastics for interior components and natural fibres for seat covers in their EVs
The next topic is closely related to the above one.
#10 Ensuring Stability in The Material Supply
The companies should also get their “A teams” on the supply chain as some of the parts and resources required to make the EVs are scarce.
It is a fact that the production of electric vehicles is now being slowed down globally due to an ongoing semiconductor scarcity. Several challenges still exist despite the CHIPS Act’s approval in August, which offers $52 billion in grants and subsidies for new American semiconductor production facilities.
In addition to taking years to build and commission, several of the factories want to develop complex chips for consumer devices at sizes of 5nm or lower, which will leave automakers, who utilise 28nm processors in the dark until they redesign their system architecture.
To get a real picture, a Ford Focus normally uses about 300 chips but one of Ford’s new EVs can use up to 3,000 chips. EV momentum is expected to make IC shortages worse because consumer desire for more safety features and passenger conveniences like seat adjustments, music, and lighting that can be controlled by electronic touch screens or connected phone applications has all contributed to this.
Electronic control units (ECUs) coupled with a plethora of mini-computers that span the length of the vehicle control the vehicle and its other functionalities and demand a tonne of ICs. A switch to zonal architecture may alter the situation by replacing all of the minicomputers with a few, more potent machines that are coupled to a single CPU.
The scarcity of chips and ICs is not just in the United States, Europe and Asia are also facing chip shortages.
Now moving on to the next important thing to win the EV race.
#11 Continuous Innovation
The best way for any company to stay in business or win the EV race is to innovate relentlessly. The EV race is not a sprint but a marathon. Automakers must commit to continuous innovation and improvement. Staying attuned to market trends, consumer preferences, and emerging technologies will be crucial for maintaining a competitive edge.
All the automakers are planning to become more digitally savvy, while BMW, Daimler, and Volkswagen were among the first to try and redefine themselves as tech-savvy companies.
The sixth-largest carmaker in the world Stellantis revealed intentions to install AI-enabled software in 34 million vehicles from 14 different brands in December 2021 as part of its transition into a “sustainable mobility tech company.” The company hopes to achieve this by attracting customers with internet-based features and services like voice-activated navigation, electronic payments, and online product ordering.
The best thing about innovation is that it can be applied anywhere. Such an example is the onboard software-driven services which can do more than upgrade car features and functioning but also decide the degree of safety and comfort of the passengers.
Conclusion
The transition to electric vehicles is no longer a distant vision but an imminent reality. To win the EV race as a car maker, a multifaceted approach is required. Commitment to sustainability, cutting-edge technology, affordability, global expansion, branding, customer support, regulatory compliance, and innovation are the key pillars of success.
The company that combines these elements effectively will not only secure a prominent position in the electric vehicle market but also contribute significantly to a greener and more sustainable future of transportation. The race is on, and the world is watching closely to see who will emerge as the champion of the EV era.
In the next articles we will discuss How countries are racing against each other to win the EV race and Who has the edge to win the EV race, the old timers like Ford or the startups like Rivian?
Next Part: What Does It Take To Win The EV Race As A Country?
