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Long Story Short: Are Electric Cars Gaining Momentum?

Will owning an Electric Vehicle finally be convenient?

(Note: companies that could be impacted by the content of this article are listed at the base of the story (desktop version). This article uses third-party references to provide a bullish, bearish and balanced point of view; sources listed in the "Balanced" section)

Electric vehicles offer transportation without the need for gasoline, lessening the impact it has on the environment. They have been gaining popularity because of this but have run into many problems along the way. The biggest participant in the U.S. market right now is Tesla. They have ruled the industry for some time, but new competition is here, and more is on its way. Lack of convenience is causing problems for all parties involved, leaving the main players scrambling to come up with solutions.

Increased Competition. Since electric vehicles started gaining popularity, the industry has been dominated by Tesla. Recently, almost all of the main car manufacturers have started releasing plans for their EV. In 2017, Volvo announced that they planned to go fully electric starting in 2019, and later clarified their intention of aiming for 50% of sales. They are not the only ones planning on stealing away Tesla’s market share. Companies such as Nissan, BMW, Mitsubishi, Volkswagen, Chevrolet, and Toyota already have cars in the industry and are performing very well in foreign markets. In the U.S., Tesla still dominates, but the competition is making moves to change that. Volkswagen has started their own charging company, and the other manufacturers have teamed up with separate companies to offer charging incentives to its clients.

Almost Convenient. For many consumers, one of the main deciding factors in whether to buy an electric vehicle or not is the convenience. When these cars first rolled out, the only place you could charge them was your home, unlike regular fuel vehicles that have gas stations on every exit. For this reason, many customers decided to stick with the option that gave them more freedom. Over the past couple of years, the main market participants have been working on fixing this aspect. Not only have they been increasing the distance the vehicles can go on a single charge, but different companies have also started installing fast-charging stations for drivers on long trips. These chargers are designed differently, they quickly fill it, but only to about 80% to limit the amount of stress that is put on the battery. Tesla has been building Supercharging stations that are not intended as a money-making project, but more so to boost sales. There are a handful of organizations building these types of terminals. A few of them have even teamed up, creating a mutual agreement to share stations, to boost accessibility.

Positive Outlook. Recent studies suggest that the future of electric vehicles may be bright. The industry has been slow growing, as it is a more expensive option that carries less convenience to own. The tax cuts helped to start the movement and the continuous efforts from manufacturers may be enough to get it to stick. According to a report from Bloomberg New Energy Finance, sales of electric cars will surpass those of internal combustion by 2037. They believe that sales will ramp up after 2022, when a wider variety of options are available, and it becomes more favorable to own. Another market study suggested that globally EV’s will grow from 3,269,671 in 2019 to 26,951,318 by 2030. China is by far the largest and fastest-growing market in regard to volume, adding half a million units in 2018.

Battery Supplies Shortages. Resulting from the increase in demand for batteries, nickel shortages may have an impact on the EV supply chain. A new report from Bloomberg announced that the price for class one nickel has jumped more than 35% since the end of 2018. As the number of electric cars being produced increases, supplies of high-quality nickel are getting slim. It is not a necessary ingredient for all batteries, but it is a key component for the most successful ones. Nickel, along with a few other compounds, are used to stabilize the battery, help it last longer, and be less vulnerable to thermal runaway. The supply of Cobalt has also been a worry for battery experts as it is the most critical element in balancing power and stability.

On the Right Path, but Not Yet There. The convenience of owning an electric car has increased dramatically, but it still has a little way to go. Charging a battery takes a lot longer than filling up a tank, which at this point is a characteristic that EV drivers will have to be okay with. Also, the addition of new charging stations has helped curb one of the biggest issues, yet they put them in the wrong spot. The charging areas that are currently set up are not like a gas station where you have the option to use the restroom or grab a snack. These terminals are in the back of random parking lots or just simply in the middle of nowhere, leaving drivers the only option of sitting in their car while in charges. There are about 13,000 EV charging stations in the United States, compared to roughly 332,000 gas stations.

Declining Sales. In 2018 more than two million plug-in electric vehicles were sold, which was a 63% increase from 2017. Although there has been a positive outlook on the market recently, sales have continued to decline in 2019. Tesla is keeping the current market alive, but non-Tesla cars have not seen the jump in sales that they hoped for. This increase would be a sign of a healthy switch to electric, exhibiting broadening of the market. In July, general plug-in car sales decreased from 2018, Tesla included. The entire EV market was down 2% while Tesla fell 7% in July. With the tax credits slowly phasing out, EV’s are having trouble making it to the road.

Slowly Making Moves. The electric vehicle industry has made moves in the right direction, but it is just not growing at the pace many had hoped for. There is still a future positive outlook as companies work on fixing clients main concern of on the road charging stations. With increased competition, consumers should see a reduction in EV prices, in turn ramping up future sales. Manufacturers will need to come up with new battery ideas if shortages continue, or the entire market could face problems.

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Long Story Short: Are Electric Cars Gaining Momentum?

Will owning an Electric Vehicle finally be convenient?

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