The world has run out of oil and gas. Or rather, we’ve run out of accessible oil and gas. Even with all of the new extraction methods available, it’s nearly impossible to find enough oil and gas to keep pace with the world’s rapidly rising demand. Luckily, there are other, more abundant sources of fuel. The question is, which ones will we exploit first?
In the past few years, the global electric car industry has experienced a meteoric rise. Companies large and small have heeded the call, and now the EV market is brimming with dozens of competing brands. While the market is still very much in its infancy, some carmakers are cashing in on the trend early by launching dedicated EV brands. Other companies are watching from the sidelines, and may soon join the fray. Let’s take a look at the pros and cons of launching your own dedicated EV brand, and determine if it’s the right strategy for your company.
What is an Electric Vehicle?
An electric vehicle is any car that uses electricity as its primary source of power. This classification includes not only battery electric vehicles (BEVs), but hybrid and plug-in hybrid cars as well also as fuel-cell vehicles that use a chemical reaction between hydrogen and oxygen to power the car. While all of these are types of electric cars, they all have one primary thing in common: electricity.
Electric vehicles run on electricity either generated onsite through renewable resources (such as solar power) or purchased from a utility company (such as your local electric utility). The electricity is then stored in a battery to be used as needed. In this way, EVs run on electricity rather than on conventional gasoline or diesel fuels.
While there are a variety of different electric car technologies, the most common method is to use a lithium-ion battery. This type of battery has been used in countless products, from laptops to smartphones, for many years. Like most technologies, lithium-ion batteries have improved dramatically in the past few decades, and now make up the lion’s share of modern EV batteries.
The Problem with Gasoline and Diesel Cars
Most people are familiar with the problems associated with burning fossil fuels, but often forget that oil-based automotive technologies also experience supply shortages. Currently, the world is experiencing a gasoline supply crisis. Depending on whom you ask, it may already be in the midst of a crisis, or soon to be.
With the price of oil rising, and demand remaining relatively stable, many people assumed that gasoline would remain relatively cheap in the future. However, the opposite has happened. The price of gas has nearly tripled in the last few years, and it’s expected to rise even more in the near future. The rising cost of gas has led to a significant shift in consumer behavior.
The Promise of Electric Cars
The promise of electric cars is wide-ranging, and likely why the global market is experiencing such rapid growth. Not only do EVs offer an alternative to gas and diesel cars, but they also address issues with air pollution, climate change, and dependence on foreign oil supplies.
In recent years, there has been increasing attention paid to the air pollution issue. Air pollution is a serious problem in most major cities, and causes significant health problems. In China, one of the world’s most populous nations, the smog problem is severe. According to the World Health Organization, smog poses a serious risk to human health, causing asthma attacks and even fatalities.
Factors that influence company decisions
There are numerous factors that determine whether or not a carmaker will choose to enter the electric car space. Chief among these is the maturity of the overall EV market. If the market is still relatively new, carmakers may be reluctant to venture into it. However, as the market grows, so will the competition, and maturity will increase accordingly.
Another factor is the size of the existing car market. If the current car market is relatively mature, and the EVs are competing against more established technologies, the overall risk of success is lower.
What are the benefits of a dedicated EV brand?
Launching a dedicated EV brand has its advantages. Perhaps the most significant is the ability to quickly capitalize on current market trends, and differentiate your company from the competition.
One of the biggest challenges for new car models is finding the right balance between the steep costs of research and development, and the corresponding costs of production. By launching a dedicated EV brand, you can avoid the development costs of a conventional car, focusing instead on the more expensive but more forgiving production process.
Is Going Fully Electric the Future of Car Manufacturing?
There are a few barriers to widespread adoption of EVs. Chief among these is the question of car ownership. Although public transit and ride-sharing services are becoming more common, they still have a way to go before they can fully replace the convenience of owning your own vehicle.
Another issue is charging the car. Many people have become so used to filling their gas tank that they haven’t given much thought to charging their battery. While more charging stations are being installed, and more options are appearing online, the problem of range anxiety persists.