Electric vehicles have swept traditional car companies, why 2022 is crucial

Traditional auto giants are vying for a larger share of the electric vehicle market.

The development momentum of electric vehicles is gradually fierce, and traditional car companies can no longer "sit still". On December 14, Toyota unveiled its "30 x 30" plan, the Japanese auto giant that plans to develop 30 new all-electric vehicles by 2030. Toyota also said that by 2030, about 40 percent of the company's sales will come from all-electric models.

1

Toyota enters the game of electric vehicles

It's a sign that after a slow start, traditional auto giants are vying for a bigger share of the EV market. Toyota (TM) produces cars that now account for just under 10 percent of global light vehicle sales, and it and other traditional automakers won't cede the market to Tesla (TSLA) and pure electric vehicle startup Rivian (RIVN).

Toyota calls its new ev product the bZ series, or Beyond Zero, which means the idea of zero carbon emissions from personal transportation. According to the plan, its first model, which will be released in 2022, is an SUV developed jointly with Subaru in the bZ4X.

Toyota has been active in electric vehicles, but its plans are slightly different from those of other traditional automakers. Toyota is investing in the lithium-ion battery capacity needed to power electric vehicles, and the company had previously announced plans to sell 8 million electric vehicles a year, however, that total includes hybrid electric vehicles like the Prius.

The release of this plan is good for Toyota's stock price, and investors are satisfied with Toyota's development whenever a new model is launched. Toyota Motor Corporation 's (TM) share price rose well on December 14. Its American Depositary Receipts (ADR) rose about 2.6% in late trading, while the S&P 500 and Dow fell 10.5% and 0.1%, respectively, on the day.

2

More models, more sales

In addition to Toyota, dozens of global automakers have already issued a large number of announcements about promoting electric vehicle production in 2021, including GM, Ford and other car companies that hope to sell a large number of electric vehicles by 2030. Electric cars seem to be taking over the global auto market, but 2030 still looks far away, when exactly will people be able to actually buy all these new, hot EVs?

Today's U.S. car buyers are likely to have no idea that electric vehicles are the next big trend. That's not to blame, as electric vehicles still account for a low share of new car sales in the U.S., at less than 3 percent. Reasons behind this include changes in government incentives and consumer preferences. But the most important reason is insufficient capacity. Aside from Tesla (TSLA), there aren't as many attractive electric cars available for purchase in the U.S.

Perhaps the mismatch between the goal and the actual product means that the impact of electric vehicles is exaggerated. But before investors make that conclusion, they should look at China, the world's largest new car market, where electric vehicles accounted for about 20 percent of new car sales over the past few months.

Brian Gu, president of Chinese electric vehicle maker Xiaopeng Motors, said: "I think 10% is the inflection point, and when it arrives, it will usher in a boom [of the entire electric vehicle industry]. His point is that when a new technology reaches 10 percent of new car purchases, the technology evolves beyond the initial stages and into the mainstream.

But the penetration rate of 10% does not happen by accident, and the choice and product quality are very important. "The reason is ... There is a wide variety of products, and there are many electric vehicle products between 150,000 and 300,000 yuan that are very attractive and very good. ”

More electric vehicles for sale means more electric vehicle sales, and the United States needs more electric vehicle products to increase its sales rate.

Starting with trucks, car companies will offer a large selection of new electric vehicles in 2022 and 2023. Tesla's Cyberruck, Rivian Automotive's (RIVN) R1T model and Ford Motor's (F)'s F-150 Lightning will all be available in 2022. General Motors' (GM)'s all-electric Hummer and Cadillac Lyriq will also be available next year. The electric version of chevrolet Silverado is scheduled to launch in 2023.

If automakers want to realize their grand plan for electric vehicles, they need to roll out more models. GM hopes to become an all-electric vehicle seller by 2035. Ford expects 40 to 50 percent of global car sales to be electric by 2030. This is similar to Chrysler's parent company, the Stellantis Group (STLA), Daimler (DAI. Germany) and Volkswagen (VOW. Germany) expected the same goal, and now Toyota motor cars think the same way.

3

What will consumers buy in 2023?

Ford is selling the all-electric Mustang Mach E and plans to produce about 200,000 units a year by 2023. Bill Ford, ford chairman, reportedly bought 412,500 shares of Ford stock for $8.5 million on Dec. 10, with an average price of $20.62 per share, by exercising stock options. Ford shares have soared 128 percent this year as of Dec. 14, after reporting a strong three-quarter report, strong demand for its electric vehicles and resuming dividend payments.

Volkswagen's pure electric vehicle ID.4 is currently on sale to U.S. consumers. Its ID.5 crossover will be sold in Europe next year, but it is not expected to appear in the US market for the time being. Mercedes will sell its EQB SUV in North America in the first half of 2022, and the high-end Mercedes EQS is now available in the United States.

BMW.Germany will launch the i4 all-electric coupe in the U.S. next year. Volvo's electric car spin-off, Polestar, is now available in two models: polestar 1 and polestar 2. After the federal tax breaks, both models are priced at just $39,000.

The Subaru Solterra SUV will also be available in 2022, the first Toyota electric vehicle from the 30 x 30 program. The Solterra SUV architecture was jointly developed by Subaru and Toyota. Soon, the Ocean SUV model of the electric vehicle brand Fisker (FSR) will also be available.

| Al Root, a contributor to Barron's

Edit | Kang Juan

Translate | Tina

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Original barronschina articles, not reproduced without permission. For the English version, see the December 14, 2021 report "EVs Are Taking Over. The Invasion Arrives in the U.S. in 2022.” wait.

(This article is for your informational purposes only and does not constitute the provision or reliance of investment, accounting, legal or tax advice.) ）

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