Written by / Zhu Lin
Editor/ Wu Jing
Design / Shi Yuchao
Source: TechXplore, CNBC, by Ethan Baron
Governments around the world are setting ambitious zero-emission targets, and major automakers are eyeing Tesla's success and jumping into the electric vehicle market.
While Elon Musk's company is currently crushing rivals on its share price, it now faces a new round of competition from traditional manufacturers with deep pockets and decades of automakering experience.
"It's an electric vehicle arms race." Dan Ives, an analyst at Wadebush Securities, said, "Tesla has a bullseye on its back — the entire auto industry is aiming at him." ”
Will these big car companies eat Tesla's "lunch"?
Experts say it may not be soon, but the eviction trailblazer, which is sought after by many fans, needs to use its strengths to stay ahead of the competition.
Toyota, the world's largest traditional car company, has also announced plans for electric vehicles
Analysts believe that traditional companies are just getting started in large-scale electric vehicle production, but they can quickly scale up with resources. As other businesses start selling more electric cars, Tesla could lose market share. From Ford and GM to Toyota, Hyundai, Honda, Porsche, Jaguar and Mercedes-Benz, almost all car companies are competing for the market.
But the reality is that their road is long and difficult, and they are far behind.
Tammy Madsen, a professor at the University of Santa Clara's Levi School of Business, said: "Traditional companies need to change, and it's a big shift. ”
Catch-up of large companies
Tesla is clearly the leader. It moved its headquarters from Palo Alto, Calif., to Austin, Texas, in 2021. According to data from data firm EV-Volumes.com, Tesla's Model 3 sedan has been the world's best-selling electric car for the past three years, while the Model Y's sales rank third in 2021, behind China's Wuling Hongguang MINIEV.
However, although it sells more electric cars than any other company, Tesla is still a rising star in terms of total car production.
The Tesla Model 3 has been the world's best-selling electric car for the past three years▼
In 2021, Tesla sold 936,000 electric vehicles, compared with 2.9 million for General Motors alone and 8.9 million for Volkswagen.
These big automakers, who have been dominating the auto market with fuel cars, are now embracing the evicted car market with all their might.
Volkswagen said it began dabbling in electric vehicles in 2013 and aggressively entering the new energy market from 2020, selling a total of 452,900 electric vehicles in 2021, a fraction of Tesla's current production.
In a letter to shareholders in February, GM CEO Mary Barra said GM aims to produce more than 1 million electric vehicles in a little over three years.
Ford said in May 2021 that it expects 40 percent of its vehicles to be electric by 2030, saying there is overwhelming demand for the upcoming electric F-150 pickup. Musk, by contrast, has been committing since 2017, but hasn't delivered a single pickup.
Huge market
Governments around the world have set goals for the electrification of transportation: the White House wants to make half of all new car sales electric by 2030; California has decreed that by 2035 all newly sold cars and light trucks must be emission-free.
Traditional automakers and startups are frantically vying for market share. According to Allied Market Research, the worldwide electric vehicle market is expected to balloon from $162 billion in 2019 to $803 billion in 2027.
The Volkswagen ID.4 compact electric SUV is in strong demand throughout the United States
Dietmar Burkhardt, owner of a Volkswagen dealership in Sunnyvale, noted that soaring oil prices have raised interest in electric cars.
In the affluent and tech-leading Bay Area, where many drivers are more keen than ever to ditch fossil fuels, customers have pre-ordered more than 300 Volkswagen ID.4 compact electric SUVs from him. He said there is a strong demand for the car across the United States.
"We have a lot of work to do." "Volkswagen is well aware that software development is a huge part of the role of the eviction market, and frankly, we're a bit behind. ”
"But we're investing heavily to get on track, and I'm sure we'll take care of that." He said.
Tesla's advantages
Tesla's factory in Berlin has just started producing cars after it opened a factory in Shanghai in 2019 to serve the growing Chinese market. Tesla's new plant in Austin, Texas, opened in early April, and Musk said on Twitter that Tesla was considering "expanding it substantially" for the full-load Fremont, Calif., plant.
Musk speaks at the opening party in Austin, Texas, on April 7, 2022
Collebs noted that Chinese EV startups have brought competition to Tesla in Asia, while U.S. startups, such as Rivian and Lucid, are pushing into the high-end market that Tesla feeds. She added that big automakers are likely to launch models that consumers see as a strong alternative to Tesla.
"We've seen models like the Ford Electric Horse and the Volkswagen ID.4 that will cannibalize Tesla's fringe market, but the electric car market in general is expanding and Tesla is still dominant, at least in the United States." Collebs said.
Wade Bush analyst Ives believes Tesla could deliver 5 million cars a year in a few years. He expects global EV buyers to spend $5 trillion over the next decade, with Tesla reaping half of that and the rest going to be taken by big automakers and startups.
Still, Tesla struggles with quality and safety issues. There have been 11 recalls in the last four months, plus a federal investigation into so-called "phantom brakes" and crashes related to Autopilot's driver assistance system. Colebus and Ives noted that Tesla owners complained of delays in repairing their cars at special centers.
Tesla did not respond to requests for comment.
Ives noted that many of Tesla's competitors will play a key role in meeting demand for electric vehicles, but the booming market means it's not a zero-sum game. "Tesla has a charm similar to Apple's, and Musk is widely regarded as a brilliant, eccentric visionary with the ability to execute grand plans," Ives said. ”
"It's ultimately Tesla's world, and everyone else is paying rent," he said, "and it's like a traveling circus that changes the auto industry forever." ”
This article was originally produced by Automotive Business Review
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