Previously planned electric vehicle (EV) investments are just a drop in the ocean, with big automakers targeting huge growth by 2030 through a massive new EV push. Prior to the pandemic and the subsequent COP26 summit, carmakers veined interest in EV, making promises of far-off investments. But over the last year, governments have vowed to achieve net-zero carbon emissions, introduced plans to phase out gasoline and diesel vehicles, and put pressure on major industries to shift to green. Now, the world’s biggest automotive companies are finally gaining momentum in their EV plans for the next decade.
One of the big changes is the short-term investment plans for several of the world’s largest car manufacturers, which are now aiming for large EV fleets within the next decade in response to rising demand and stricter regulations on traditional vehicles. In November, a Reuters analysis showed that global automakers are planning to spend over half a trillion dollars on EVs and batteries between now and 2030. This is a $200 billion increase from just three years prior.
But there is speculation that the jumping on the bandwagon approach to EV investment could lead to an oversupply. While mandates for zero carbon emissions are coming into place in cities such as London and Paris, inevitably leading to an increase in demand, there is still uncertainty about how high uptake levels will rise by 2030.
Despite doubt around demand, many companies are going full steam ahead in their EV investments. Just this week, Toyota announced plans for a $1.29 billion battery plant for electrified vehicles in North Carolina. Toyota expects to produce around 200,000 lithium-ion batteries in the factory, for its all-electric and plug-in hybrid EV fleet from 2025. Output could increase to 1.2 million annually as the firm’s EV production increases. The new facility will create around 1,750 jobs.
Toyota previously announced an increase in its EV investments, totaling around $3.4 billion, in October this year. As part of this plan, the company chose the North Carolina site for its battery production due to the high levels of renewable energy production in the state. This comes as part of a larger strategy for Toyota to achieve carbon neutrality by 2050.
Nissan has made similar commitments in recent months with plans to invest $17.6 billion in its EV fleet as part of its ‘Ambition 2030’ plan. The company hopes EVs will account for half of its sales by 2030, through the introduction of several new models to suit various consumer needs. Nissan aims to retail 75 percent electrified and hybrid vehicles in Europe, 55 percent in Japan, and 40 percent in the US and China by the end of the decade.
The auto manufacturer expects to launch its all-solid-state battery fleet by 2028, with a pilot facility opening in Yokohama in 2024. This innovative new battery type would significantly reduce charging times. This is part of a plan to eventually reduce the cost of EV batteries to $75 per kWh, around half of the 2020 price.
Nissan is not the only carmaker to announce grand plans for a new EV fleet. Volkswagen has just announced a new $100 billion EV transformation plan, with the objective of making a quarter of all sales EV-based by the end of 2026.
VW announced plans for its Project Infinity EV earlier this year, an all-electric car with autonomous driving capabilities, expected to be launched in 2026. The car will provide greater internal space, as the company focuses on changing the traditional interior design of the vehicle.
CEO of VW Herbert Diess has been battling against trade unions over the future of the company’s biggest plant, Wolfsburg. But this week VW announced it would be bringing EV production to the facility earlier than originally planned. The firm not only hopes to rival other major automakers but also to compete against the current EV market leader - Tesla.
Tesla is also completing its first European assembly line just a few hours away from the VW plant. But the optimistic CEO of VW stated, “Wolfsburg will get a whole new identity that will ensure the site is internationally competitive.”
VW hopes not only to break the European EV market but also to dominate on Tesla’s home ground, the U.S. Diess announced plans to double the company’s overall U.S. market share by 2030, to 10%, thanks to new models such as the Volkswagen ID Buzz microbus and Audi Artemis. He believes that President Biden’s push for net-zero will raise demand across the country. With several brands falling under the VW umbrella, including budget brand Škoda and the luxury Porsche, Diess believes the firm can compete aggressively with Tesla over the next decade.
The future of car manufacturing has shifted significantly over the past two years, from companies showing little interest in EV to it forming part of their main investment strategy for the next decade. As auto majors around the world continue to boost their funding of EVs and batteries, we can expect a very different road landscape by 2030.
By Felicity Bradstock for Oilprice.com
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