Consumer Discretionary

Electric Vehicles Are Not The Future, They Are Here Today

<p style="text-align: justify;">Electric vehicles are increasingly growing the attention on our nation&rsquo;s roadways. Governments worldwide are encouraging the EV industry through subsidies and regulations, and consumers are demanding low-emission commuting instead of fossil fuel-driven vehicles, which endangers our planet.</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 14pt;">Current Scenario</span></h2><p style="text-align: justify;">At the highest level, President Biden signed an Executive Order in August of 2022, setting a target of 50% of U.S. light-vehicle sales by 2030 comprising zero-emissions vehicles, which along with EVs, the administration said includes PHEVs and fuel-cell vehicles (FCEVs).</p><p style="text-align: justify;">Not long after, California set a definitive sunset date for internal combustion, announcing a mandate that starting in 2035, all new passenger vehicles sold must be electric or hydrogen-fueled. The first phase-in period for the mandate begins in 2026.</p><p style="text-align: justify;">Then there&rsquo;s Europe, already underway with aggressive vehicle emissions mandates, including bans on internal-combustion vehicles in some major cities. In late fall, the European Parliament and Council announced a provisional rulemaking to ban the sale of internal-combustion light vehicles throughout the European Union starting in 2035. Europe-based automakers didn&rsquo;t overtly object, but their industry trade association spoke of issues many less EV-optimistic sources cite as cautionary signals in a rush to electrification.</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 14pt;">Adoption of EV</span></h2><p style="text-align: justify;">When the first EVs were manufactured/introduced, very high initial cost, low battery range, low speed, and much lower environmental concerns resulted in the industry not taking off. The last ten years, though, have seen universal interest among original equipment manufacturers (OEMs), customers, and governments, resulting in huge investments in EV manufacturing and battery technology, resulting in millions of vehicles being sold in various countries.</p><p style="text-align: justify;">Customers are coming around to EVs. In spring 2020, 34% of survey respondents were willing to buy an electric vehicle. In March 2021, the number grew to 51 percent. Similar increases were seen internationally, with interest in EVs roughly doubling in China, France, Germany, and the U.K.</p><p style="text-align: justify;">Tesla has been one of the most successful EV company in the world, but others, including Mercedes Benz, VW, Ford, GM, Audi, Hyundai, Nissan, BMW, and Kia, have also launched EVs, which are receiving customer demand in different markets.</p><p style="text-align: justify;">There is no doubt that EVs are the future of driving and mobility, and while newer materials may be used in the battery chemistry and innovations will keep taking place, the trend is irreversible because of the following reasons:</p><ul style="text-align: justify;"><li>Significant cost savings on running and maintenance</li><li>Eco-friendly savings on CO2 emissions</li><li>Incredible driving experience by reducing driving fatigue/stress</li><li>Convenient charging</li><li>Tax benefits</li></ul><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">Electric vehicles are here today!</p><p style="text-align: justify;">The OEMs are working together to move from traditional vehicles to electric cars. Owning an electric vehicle with the right amount of functionality and infrastructure has plenty of benefits. With so many positives, this could be the year to own a battery-powered vehicle.</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">Think and go electric!</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;"><span style="font-size: 10pt;"><em>This article was contributed by our expert <a href="" target="_blank" rel="noopener">Fernando Lastra</a></em></span></p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><h3 style="text-align: justify;"><span style="font-size: 18pt;">Frequently Asked Questions Answered by Fernando Lastra</span>&nbsp;</h3><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">1. What are the factors affecting the supply chain of electric vehicles?</span></h2><p style="text-align: justify;">The increased demand for EVs is lowering emissions and reducing fuel costs. But it's also exacerbating the industry's existing supply chain challenges, including component and raw materials shortages, high production costs, shipping delays, and inefficient production processes.</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">2. What is the new technology in electric car batteries?</span></h2><p style="text-align: justify;">The race for better electric car batteries is called the next gold rush. Here's what's coming.<br />Many new technologies are coming that may make it easier to own and run a zero-emission vehicle. The woes of "range anxiety" and "long charging times" will soon be a thing of the past, with battery packs offering over 500 miles of range between charges that only take a few seconds and power available to you over the air.</p><p style="text-align: justify;">We are at the threshold of a battery revolution. To get an EV in every garage, EV makers know that Americans demand more range and quicker charging. They know the limitations of the current lithium-ion batteries that power today's EVs.</p><p style="text-align: justify;">Research at the Chalmers University of Technology has focused on using new battery tech as a structural component of future electric cars. Using carbon fiber as the negative electrode while the positive is a lithium iron phosphate, these batteries would be extremely stiff and rigid for structural components. This could lead to lighter vehicles in which body parts are the batteries.</p><p style="text-align: justify;">Also known as lithium ferrous phosphate (LFP) batteries, the type to be produced at the new plant are a lower-cost alternative to the nickel- and cobalt-containing batteries used in most electric vehicles in the US and Europe today.&nbsp;</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">3. What is the future technology of EV charging?</span></h2><p style="text-align: justify;">Technologies like microelectronics essential for fast charging are some of the fields with big potential for start-ups or businesses in the DC fast charging stations market. These technologies that can support up to 120 kW charging are key to the rapid charging of EVs.</p><p style="text-align: justify;">Innovations like cloud-based EV charge systems are surging as solutions to improve EV connectivity with charging platforms, allowing precise charging, billing, preventing security breaches, and even improving user experience.</p><p style="text-align: justify;">But beyond technology, there is a strong need for deep collaboration between stakeholders participating in the development of EV infrastructure and manufacturing. The automotive industry, chip and battery developers, governments, academic institutions leading research, and consumers must work together. This is particularly important due to the need to strengthen the transformation of the transport sector that allows a smooth integration of EV infrastructure.</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">4. What is consumers' perception towards electric vehicles?</span></h2><p style="text-align: justify;">As of April 2021, over 13 out of 20 U.S. consumers perceived the cost of electric vehicles to be worse than that of their gas-powered counterparts. By contrast, the perception of electric vehicles' effect on the environment of 67 percent of respondents was better than that of gas-powered vehicles.</p><p style="text-align: justify;">45% of respondents stated that pure electric vehicles were just as good as or better than traditional gasoline vehicles. 24% of respondents said they would consider or expect to purchase plug-in hybrid electric vehicles for their next purchase or lease.</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p>
KR Expert - Fernando Lastra

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