The automotive industry is going through a turbulent period of transformation, rapidly transforming from an internal combustion engine that has been used for more than 100 years to an electric vehicle. Some automakers seem unable to give up the internal combustion engine, which has been profitable. Even BMW has been stressing the need for an internal combustion engine.
The same is true of Japan's Toyota, the world's number one automaker, which is the originator of hybrids. It seems they still work harder than electric cars when it comes to selling hybrids. So far, there are not many pure electric models. Therefore, Toyota has also been evaluated as lagging behind other brands in terms of pure electric vehicles. Toyota has consistently stated its position that hybrid vehicles can contribute to carbon neutrality. In the electrification plan announced last year, it was also revealed that the proportion of electric vehicles suitable for different regions, rather than the extreme practice of "stopping the internal combustion engine". Toyota plans to continue selling hybrid vehicles in Europe for the time being.
The same goes for other manufacturers, where electric vehicles have many difficulties in maximizing profitability. Because at present, the rise in battery prices and raw material prices is skyrocketing.
One of the things that both internal combustion engine cars and electric cars have in common is that they are both two rows of sofas, four wheels, and can roll. For users may feel that their power is very different, but for parts suppliers it is not so big difference, because the wheels are still needed, the seats are still needed, the interior is still needed, the glass is still needed. And whether it is an internal combustion engine car or an electric vehicle, their production process is also very similar.
Therefore, in theory, the new power of car-making companies is still a catch-up state for traditional internal combustion engine companies. Catch up with factories, catch up with manufacturing processes, catch up with the management of parts suppliers, and so on.
Not all manufacturers are hesitant about electric vehicles. Hyundai Motor Group is very successful in the field of internal combustion engines in the world's top five, is actively transforming electric vehicles. The electric vehicles Ioniq 5 and Kia EV6, based on the dedicated platform E-GMP, are receiving prestigious awards worldwide. In particular, Ioniq 5 pioneered a new approach called "space" that changed the definition of the car. Starting from the Ulsan plant, the Ioniq 5 was produced at the Indonesian plant last month, making its first overseas production. Starting at the end of this year, the GeniseyS GV70 electric model will also be produced at the Alabama plant in the United States.
The problem is with the consumer. High prices and reduced subsidies make it more expensive to buy electric vehicles. Everyone can also clearly feel that due to the instability of the international situation recently, the price of battery raw materials has risen, resulting in a very obvious increase in the price of pure electric vehicles. The state is also interested in reducing subsidies for pure electric vehicles, and it is said that there will be no subsidies at all next year.
Although pure electric vehicles enjoy the national new energy vehicle policy, there is no purchase tax. And in the process of use, charging does not refuel, and the cost of car maintenance is very low. However, because the price of new energy vehicles is very expensive, it is not enough to offset the difference in the cost of using fuel vehicles.
Therefore, the key to the success of electric vehicles lies in reducing production costs. Most manufacturers form joint ventures with battery companies to reduce the unit cost of batteries. GM and LG Energy Solutions have agreed to form a joint venture in 2019 and four manufacturing facilities in the United States. Ford and SK Innovation also formed a joint venture and set about building a factory.
The alliance between manufacturers continues. Ford is preparing to produce electric vehicles using the Volkswagen Group's electric vehicle platform, the MEB platform. China's Geely Holdings and Renault are also developing a joint model. Eco-friendly cars using the CMA platform are in full swing, with the goal of being released in 2024.
Automakers are working on ways to survive while devising various approaches. The fundamental purpose of their doing so is not to achieve good sales results, but to survive in this complex new energy vehicle market and track.