A long line of unsold 2021 Leaf electric vehicles sits at a Nissan dealership Sunday, Nov. 8, 2020, in Highlands Ranch, Colo. (AP Photo/David Zalubowski)
December 31, 2020
As a pandemic raged and a world economy tanked, electric vehicles still had a banner year in 2020. EV poster child Tesla saw its stock price rocket into the stratosphere, making it the largest car company in the world by market value. Dozens of startups went public or struck deals with larger partners to help get their products to market. And the calendar for the next five years started filling up with product announcements for EV tractors, delivery vans, and luxury models.
Experts agree that the space is set to enter 2021 with a lot of momentum. Still, uncertain macro conditions due to the aftermath of the virus and the inherent fluctuations of a young industry still finding its footing in the marketplace make it so EV's exact trajectory is hard to predict.
"It's marvelous to see there's so much fascinating interest in the market," said Peter Rawlinson, CEO of Lucid Motors, the luxury EV manufacturer set to start shipping vehicles in late 2021. "But what I would say is this: there are some bad actors out there giving this space a bad name, and they're not all going to succeed and there will be blood on the carpet."
Even amid 2020's EV exuberance, there were cautionary tales. GM dramatically scaled back a deal with Nikola, a developer of electric and fuel cell trucks, after a short-seller report alleged fraud at the startup. The scandal eventually led to the resignation of founder Trevor Milton.
Europe and China also continued to outpace the U.S. in providing subsidies and a supportive regulatory environment for the nascent industry, according to most industry watchers.
China saw less of a drop in electric vehicle sales due to the global downturn, which caused vehicle sales in general to plummet. Europe, meanwhile, saw EV vehicle sales increase a whopping 45 percent year over year, according to research from BloombergNEF.
While the incoming Biden administration offers hope to some of a more supportive posture toward electric vehicles, the aftermath of the pandemic may discourage a gas-guzzling consumer base that is already hesitant to make the leap into battery-powered cars.
"When you look around the market, there still aren't that many vehicles that fall into what we might call the expectation range for what consumers are wanting to pay to get access to that technology," said Ryan Robinson, automotive research leader at Deloitte.
With consumers still worried about the future of the economy, this could put a damper on EV sales, right at the moment where a number of companies are hoping to break into the market.
"There's still some fairly significant risks that we see on the horizon," Robinson said. "It's going to be a very critical year in 2021, as we start to see some of these more concerted efforts on the manufacturers' part to roll out EV technology in the marketplace."
He described 2021 as "a bit of a ramp-up" with releases concentrated later in the year.
Rawlinson knows the stakes well. Lucid plans to manufacture 7,000 units late next year after breaking ground on its Arizona plant roughly one year ago.
"I'm a very logical guy. I don't make rash promises or wild claims," he said. "This year we've made 80 prototypes. We haven't sold a single car. So we're not declaring victory until we make them and start selling them to the public. Talk is cheap in this game."
Lucid has the advantage of offering one of the first luxury EV cars, so the competition is sparse. Other companies looking to produce more economical electric cars must contend more directly with Tesla, though Rawlinson argued that EV makers shouldn't see the competition as one-to-one. The real goal is to take market share from the incumbent gas-powered vehicles.
Competition is still a tricky thing when it comes to the electric vehicle market. Many in the industry invoke the neologism of "coopetition" to describe the cooperative, collaborative climate that still prevails among small and larger players alike.
Tony Sklar, SVP of investor relations at Ideanomics, a financial services provider focused on the adoption of commercial electric vehicles, compared the market to the cell phone industry a few decades ago. The sector is constantly realigning itself through mergers and acquisitions to take advantage of new innovations and manufacturing abilities.
"The idea of a competitive landscape in the commercial EV sector doesn't exist quite yet," he said. "There aren't really a lot of competitors because there aren't really a lot of products. We're not all vying for the same customers because the customers aren't really sure what they want yet."
Sklar predicts that in 2021 financial interest in EVs will continue to grow, and the market for commercial options will widen as more players roll out offerings. Localized transport such as last-mile delivery and ridesharing will dominate the segment, he said, until battery technology can better accommodate long-haul trucking — though, hybrid options do exist in the space.
"Commercial electric vehicle adoption will continue to grow at a pace that is much larger than it has been this year," he said.
Somewhere to Charge
A challenge that commercial and personal EV makers share is a lack of infrastructure — a problem that all the major players will be scrambling to solve as demand picks up. Here again, partnerships are leading the industry.
General Motors this year announced plans to partner with charging network EVgo to build 2,700 new fast-charging stations across the U.S. in the next half-decade.
"We've actually done a decent job in putting in the building blocks. Now our job is to accelerate," said Alex Keros, lead architect of EV charging infrastructure at General Motors. "I see 2021 as a matter of accelerating what we're doing, getting more public charging through EVGo, getting more EVs into the market so we can create really powerful utility relationships."
EVgo's model allows drivers to pull into a parking spot at a convenient location, such as a grocery store or retailer, and charge while they're doing something else.
This level of convenience, if it's successful, has long been a crucial factor in getting the general public to transition to electric. Right now, consumers' biggest concerns are battery life/range and whether they can access charging stations, which remain unevenly distributed nationally.
"If you ask people what their daily commute is or how much distance they cover in their vehicle in a day, it's nowhere near what EV can actually do these days," Deloitte's Robinson said. "But the difference between a real challenge and a perceived challenge is actually quite small."