The Electric Vehicle Revolution Has Hit the Tipping Point
I have a few friends who have shunned electric vehicles. They’ve said they would never buy one.
But in a decade or two, they may not have much of a choice… especially if they want a new car or truck.
Almost every major automaker is signaling an EV-only future. And it’s going to be a rapid transition.
It all started with Volkswagen‘s (OTC: VWAGY) “Dieselgate.” Back in 2015, the U.S. Environmental Protection Agency sued the German carmaker, alleging it cheated on its diesel-powered cars’ emissions tests. The company eventually pled guilty.
As of June 2020, Volkswagen had racked up $33.3 billion in buyback costs, fines, penalties and settlements. And here in the U.S., the company was ordered to pay a $2.8 billion criminal fine and $1.5 billion in civil penalties.
But that was just the tip of the iceberg.
It also agreed to pony up $2.7 billion for environmental damages and to develop “clean-emissions infrastructure.”
So it formed a new U.S. subsidiary called Electrify America. This company is installing thousands of EV charging stations across the U.S.
Shortly after the lawsuit, Volkswagen said it would become carbon neutral by 2050. A big part of that is moving to EV-only production.
Last year, the company delivered 231,600 EVs. That is three times the number of EVs it delivered in 2019.
Volkswagen is just one of the majors that are transitioning exclusively to EVs. Let’s look at a few others.
EV Inflection Point
General Motors (NYSE: GM) has jumped into EVs in a big way too. At the Consumer Electronics Show this past January, CEO Mary Barra said the auto industry had reached “an inflection point” regarding EV adoption.
It plans to initially spend $27 billion on EV and autonomous vehicle research and development and production.
By 2025, it expects to have 30 new EV models globally, including 20 models for North American customers. It also hopes to sell 1 million EVs by that year.
During a press conference, GM Executive Vice President Doug Parks said, “We don’t just want to participate; we want to lead. Tesla’s got a good jump, and they’ve done great things.”
GM’s electric Hummer attracted a lot of attention when the company unveiled it several months ago. The all-electric Hummer is slated for 2022 deliveries.
Last week, Ford Motor Company (NYSE: F) announced it will spend $29 billion through 2025 on leading the “electric vehicle revolution.” That represents a dramatic ramp-up of Ford’s spending on EVs.
But Ford is thinking beyond today’s EVs. It wants to lead in autonomous vehicles too.
Back in 2017, Ford purchased Argo AI. It spent $1 billion on the artificial intelligence firm to beef up its capabilities.
It’s also partnered with Google’s parent company, Alphabet (Nasdaq: GOOGL), and Microsoft (Nasdaq: MSFT). It wants to improve its data analysis, cloud computing and quantum computing abilities.
One major automaker that’s been noticeably absent from the migration to EVs is Toyota (NYSE: TM). But right on the heels of last week’s announcement from Ford, Toyota said it would finally bring two new EVs to the U.S. later this year.
It’s also planning to introduce a new hybrid vehicle. The company has plenty of expertise in that area, having introduced the Prius almost 25 years ago.
At this point, it’s clear that the auto industry is diving into EVs in a big way.
It’s my personal opinion that if you’ve never driven one, you owe it to yourself to take a test-drive. You won’t be disappointed.
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