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Will electric cars see off traditional car makers?

Will electric cars see off traditional car makers?

Suppose you had a child getting a driver's license right now. What advice would you give them about the best car to buy (or not)?

In the film 2040, filmmaker Damon Gameau speculated that by 2040 cars would become a stranded asset, as self driving took away the relevance of ownership. In a recent interview, a rusted on SUV driver proclaimed that electric cars would never out sell electric. The evidence seems to be that it's game up for fossil fuel guzzling cars and there are definitely signs of diminished car ownership, especially in more densely populated cities - and with more people working from home. 

Which of the old school car makers is going electric?

Many of the traditional car makers have announced full or partial plans to transition to electric vehicles. 

  • GMH (General Motors) has announced it would eliminate its fossil fuel-powered cars completely by 2035.
  • Volvo, has committed to transition to 100 percent electric powered vehicles, built with renewable energy by 2030, starting with an SUV that is also leather-free. It will be sold online only, to take up less space and avoid overproduction.
  • Jaguar is transitioning to become an all-electric brand by 2025. ⁠The Jaguar Land Rover group has also announced plans to electrify Land Rover cars from 2024, and over the next five years, Land Rover will add six electric versions of its SUVs to its portfolio. Electric versions of every single Jaguar and Land Rover model will be available as an EV by end of the decade. ⁠
  • BMW, Mercedes, Audi all have electric vehicles in their ranges, but no announced full conversion plans.
  • Volkswagen's goal is to be the automaker that mass produces the electric car. This week they announced plans to drive down the cost of producing batteries for its electric vehicles. The group are the second largest in the world based on sales, and they are intent on reducing the costs of producing batteries by up to 50 percent, build multiple battery factories around the world, expand its network of charging stations, and eventually transition to solid-state technology that would cut costs and boost efficiency. 

Tesla owns the EV market right now

The big competition in the EV space is for range, which seems to be around 400km -  and better batteries. Tesla is the old guard in this space with by far the most experience. Tesla car entry level batteries give you 400km range and are designed to last 300,000-500,000 miles. Of course to date, very few batteries have been replaced. Volkswagen is very focused on transforming it's operations. Group CEO Herbert Diess sums up the industry's plans generally as he quotes his own:

“OUR TRANSFORMATION WILL BE FAST, IT WILL BE UNPRECEDENTED. THE TRANSFORMATION WILL BE BIGGER THAN ANYTHING THE INDUSTRY HAS SEEN IN THE LAST CENTURY.”

The car market is disaggregating

As cars become electric, smaller and less complex, the opportunity for smaller players is enormous. The car at the top of this article is an Altera. It is actually a solar electric car and it went to pre-order in the USA December 4th, 2020, priced from $25,900 to $46,900+.  According to the makers, the car is radically light and wildly efficient. Inspired by fighter jets and race cars, Aptera's aerodynamic composites are many times stronger than steel. You pay more for the car as the range extends.

Welcome to the future. Low carbon, more competitive manufacturing and less need for cars.  It's going to be a very interesting ride.

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