- Introduction of low-cost models to satisfy the typical mileage requirements at an acceptable price point.
- OEMs will need to develop more innovative approaches to the life cycle management of EVs.
- Nissan Leaf, Hyundai IONIQ electric and Tesla Model 3 will be key to making EVs a viable option for the typical consumer.
- Automotive industry should not expect a return to the new vehicle sales volumes of recent years in 2021, experts say.
Electric vehicles will transition from a niche to mainstream this year with the introduction of low-cost models that satisfy the typical mileage requirements at an acceptable price point, industry experts said.
As EV owners shift from the legacy of environmentally conscious, James Hodgson, Principal Analyst for Smart Mobility and Automotive at ABI Research, said that enthusiastic technology first adopters to more typical automotive consumers and OEMs will need to develop more innovative approaches to the life cycle management of EVs.
Models slated to be introduced to market include the Skoda Enyaq iV, delivering a 316-mile range with a starting price of $41,139 and the SEAT Cupra el-Born delivering a 310-mile range.
Both models demonstrate the spread of VW’s modular electric drive matrix (MEB) EV-specific platform throughout VW’s brands.
Although EVs still command a cost premium over Internal Combustion Engine (ICE) equivalents, Hodgson said that high-volume models, such as those based on the MEB platform, the Nissan Leaf, Hyundai IONIQ electric, and the Tesla Model 3 will be key to making EVs a viable option for the typical consumer.
“For success in 2021, especially after a very challenging 2020, one must understand fundamental trends early, and take a view on those trends that are buoyed by hyperbole and those that are sure to be uncomfortable realities. Now is the time to double down on the right technology investment,” Stuart Carlaw, Chief Research Officer at ABI Research, said.
Critical elements
However, Hodgson said that smart charging technologies, support for occasional Direct Current (DC) fast charging, and battery management will be critical in supporting mainstream consumers in their transition from ICEs to EV ownership.
Furthermore, he said that the automotive industry should not expect a return to the new vehicle sales volumes of recent years in 2021.
“The market size is expected to remain subdued until 2024 given the prospect of repeated lockdowns, long-term remote working, and a bleak macroeconomic outlook,” he said.
In the first half of last year, he said the market for new vehicles contracted by around 70 per cent due to Covid-19.
“Covid-19 and the measures taken to contain the spread of the virus dealt a double blow to the already faltering automotive market, disrupting supply chains and depriving the industry of the bricks-and-mortar retail environment on which it heavily relies,” Hodgson said.
Market to remain subdued until 2024
Many OEMs reported a return to growth in the third quarter of 2020 as offset demand from the first half of 2020, manifested in a summer period that saw many governments lift restrictions and allow auto dealerships to reopen.
“The market size is expected to remain subdued until 2024 given the prospect of repeated lockdowns, long-term remote working, and a bleak macroeconomic outlook,” he said.
At the same time, he said a boom in used vehicle sales will further cannibalise the precarious new-vehicle market.
As a result, many innovative technology developers are looking to the aftermarket and retrofit space to account for the OEM interest drop, Hodgson said.