EV demand surge has automakers at the ready says Forbes

Car manufacturers are making sure they are prepared to produce new electric vehicles (EVs) and hydrogen fuel cell vehicles to meet increased consumer demand

Driven largely by public policies aimed at reducing CO2 emissions and promoting more sustainable mobility, the market for electric and hybrid vehicles is booming. According to Forbes Senior Contributor, Ken Silverstein, automakers are also accelerating their electrification efforts in order to keep in step with the growing demand.

EV-friendly policies

New legislation is being introduced, particularly in Europe and the United States, aimed at lowering carbon emissions and encouraging more sustainable mobility options, Forbes points out. The European Union, for example, will be phasing out internal combustion engines by 2040 while the US is aiming for all vehicles sold in the country to run on electricity by 2030.

In addition, the US Inflation Reduction Act (IRA) is set to reduce CO2 emissions by 40% due in part to incentives for acquiring electric and hydrogen cars. Specifically, the IRA provides a $7,500 tax credit for EVs starting in 2023 that will continue over the next ten years.

These electric-friendly policies are expected to foster the demand for EVs, which today account for just 2% of the global car market, says Forbes. But by 2050 hybrid vehicles running on a combination of electricity and gas are expected to make up 34% of cars in developed countries and 28% in emerging economies whereas electric vehicles are projected to reach 26.4% by 2030.

Automakers ready

To meet this increased demand for fully electric and hybrid cars, auto companies are ramping up their EV efforts. Toyota, for instance, plans to go from today’s 21% sales of electric or hybrid cars to 40% by 2025. “Zero emissions from our vehicles are the ultimate goal, and we believe the path to getting there is with a portfolio approach – fuel cell vehicles, hybrid vehicles, plug-in hybrid vehicles, and battery electric vehicles,” Toyota claimed in its sustainability filing. 

Another carmaker pursuing electrification is Ford and by 2026 the company will strive to produce more than 2 million EVs. To reach this goal, Ford is investing heavily in EV technology and charging infrastructure and is expected to invest at least $50 billion in electric cars and battery production between 2022 and 2026.

Volkswagen is yet one more auto manufacturer to bank on electric vehicles. The company claimed that last year it delivered more EVs than ever before with 369,000 electric cars worldwide, a 73% increase from 2020. “By significantly exceeding our CO2 targets once again, we have demonstrated our fast and systematic approach to sustainability and the transformation towards e-mobility through our ACCELERATE strategy,” said Volkswagen CEO Ralf Brandstätter.

The German automaker has set its sights on the complete electrification of its new vehicle fleet and is looking for at least 70% of its European sales to be for electric vehicles by 2030 and 50% in North America and China.

EV demand
Automakers ready for EV demand | Credit: Unsplash

Hydrogen fuel-cell options

A number of car manufacturers are also responding to the demand for sustainable mobility with hydrogen fuel cell-powered cars, including Honda, Hyundai, Toyota, and BMW, says Forbes. Honda, for example, is working with General Motors to develop a fuel cell system for its cars and plans to sell 60,000 by 2030.

Automakers see hydrogen as an excellent alternative because it is abundant, renewable, and non-polluting. Moreover, hydrogen fuel cell-powered cars have the capacity to run further than electric vehicles before refuelling is required. Forbes, citing Bloomberg New Energy Finance, claims that hydrogen could supply 24% of the world’s energy demands by 2050 and at the same time cut CO2 levels by 34%.

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