The electric car market competition is about to burst.
Automotive News, Electric - 21st January 2022
Consumers will soon have more options in the electric market than ever, alongside brands currently in the market with hybrid or full electric which are at Tynan Motors including; Hyundai, MG, Mitsubishi, Mercedes-Benz, Subaru and Kia. New competitors like Sony are now entering the mix and unveiling a snazzy-looking concept vehicle that combines its blockbuster entertainment portfolio with a battery and some wheels. Amazon is also not far behind, backing a new range of electric vans from Stellantis, the company formed from the merger between Chrysler and Fiat. Mercedes also has announced plans for a battery-powered car with a 600-mile (965 kilometres) range as well as their newest electric vans range. In the background, Apple is lurking with its own plans for the market, and Tesla is hardly going to be short of the financial muscle to beef up its own range. Volkswagen has an increasingly impressive range of electric vehicles, and Toyota and Ford are ramping up investment. There is no slowing down for the electric vehicle market.
With relatively few moving parts it is a lot easier to get into the electronic car business than it ever was to make old-style combustion engines. It is going to be about design, connectivity, and the ability to access capital. Lots of different companies have some or all of those skills. The result? The market is about to get very crowded, very quickly, with a pile of money thrown at carving out a slice of the market. But this is something to celebrate if you’ve ever even thought about buying into the electric market. True, some investors are going to lose a lot of cash. Sony might never get a single yen back of the money it has spent on its prototype, and neither might Apple. Plenty of the VC-backed start-ups will be remembered only by a handful of vintage EV collectors some time in the 2080s, while Mercedes might well find that no one really wants to drive 600 miles without stopping for a coffee and a charge-up. For the rest of us, however, massive over-investment in the sector is great news. Here’s why.
“Investment bubbles are usually criticised, especially on the business pages. And no one would deny that they have their downsides. And yet a simple fact remains. They are also a great engine of progress – and we are about to see that all over again in electric vehicles.”
First, consumers will have far more choice, and even better, they will effectively be subsidised. The NSW government announced from 1 September 2021 a $490 million incentive package as part of its Net Zero Plan. This means the government in NSW will provide rebates of $3000 on the purchase of the first 25,000 EVs sold in New South Wales. Rebates will only be available for cars retailing under $68,750, making sure the rebate is going to the cars more people can afford.
There will also be a large array of options, including different kinds of battery-powered cars, different kilometre range options, design, brand and more. The market can make a far better decision if it has plenty of options to choose from - and that is what we are about to get.
Next, intense competition, combined with lots of money, will accelerate the development of new technologies. There is still a huge amount of innovation to come. Different kinds of batteries may still be developed, and they may use more plentiful cheaper materials. Tesla, for example, is switching the chemistry of its batteries to help it ramp up production, but there is still plenty of scope for new thinking. We may see different types of bodies to reduce weight, or heating systems to reduce power consumption, while charging times may be dramatically reduced with new types of cable. We will see. The point is all the money pouring into the industry means that will happen a lot faster than it otherwise would.
Finally, it will mean petrol engines are eliminated far more quickly. Just a couple of years ago, the idea that the combustion engine would be all but eliminated by the end of this decade would have seemed like the stuff of science fiction. With more than a quarter of the new vehicles sold in the UK last month battery- powered, it hardly seems far-fetched at all. With so much investment, and prices coming down rapidly, it will happen very soon – and that will be better for the environment.
Investment bubbles are usually criticised, especially on the business pages. And no one would deny that they have their downsides. Capital is wasted, time is spent on failed projects, and investors get caught up in the hype and end up losing a lot of money. And yet a simple fact remains. They are also a great engine of progress – and we are about to see that all over again in electric vehicles.
To talk to our team about our current electric and hybrid options, please call us on 02 8559 0088.
Story line: Sydney Morning Herald.