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Competition Heats Up For Tesla In EV Market – Forbes

Charger with Tesla logo at a Supercharger rapid battery charging station for the electric vehicle … [+] company Tesla Motors, in the Silicon Valley town of Mountain View, California, August 24, 2016. (Photo by Smith Collection/Gado/Getty Images).
Globally, there are approximately 1.2 to 1.3 billion cars on the road, which includes about 60 million electric vehicles. Thus, the market share of EVs is low, but it’s early. Tesla is clearly the pioneer in the design, manufacturing, and sale of electric vehicles. Tesla sold its first EV, the Roadster, in 2008. In the early days, the cost to purchase an EV was prohibitive for the general public. However, with improvements in technology, lower-priced models have been introduced and the barrier to entry is considerably lower. Which companies have the greatest market share in the EV space? Will EV prices reach parity with the cost of internal combustion vehicles? Will the internal combustion engine become extinct?
Tesla leads all others, selling slightly over 936,000 units in 2021. This gave the company a market share of nearly 14%. Close behind Tesla was the VW Group, with just over 11% of the market last year. Chinese-based BYD was third (9%); followed by GM (7.6%); Stellantis, an Amsterdam-based company (6%); Hyundai Motor (5%); and BMW Group (4.8%). Mercedes and Toyota were in the top 12. Ford was noticeably absent.
Which countries have the largest EV market? According to the Bloomberg Electric Vehicle Index Country Breakdown, China has the largest market for EVs at 34%, followed by the U.S. (28%), and Germany (11%). Asia is leading the transformation to EVs, followed by Europe and the U.S.
Several governments have offered incentives for buyers of EVs. These incentives included, among others, tax credits and lower interest rates on EV loans. However, many of these incentives are coming to an end. According to Anthony Sassine, CFA, Senior Investment Strategist with KraneShares Funds, it is more difficult to register a traditional internal combustion engine in China than an electric vehicle.
What motivates buyers of EVs? The strongest motivation for buying an EV is environmental. The second leading reason is the design and technology of EVs. The result? In Norway, 75% of the cars sold last year were EVs. In fact, the government of Norway plans to completely phase out internal combustion vehicles by 2025. In 2021, 28% of all cars sold in Europe were EVs.
Charging stations are a necessity for full adoption of EVs. China again leads the way with approximately 800,000 public charging stations. The United States has just under 100,000. The Netherlands, South Korea, and France round out the top five.
How far can you drive in an EV? That depends largely on the type of battery. Tesla began with a nickel-based battery, which offers a longer distance, greater reliability, but costs the most. Others, such as the lithium-ion battery are less expensive but have a shorter range. The Tesla Model S has the longest distance rating but will cost $100,000 or more. Thus, the cost of a long-range EV is considerable.
Will the cost of EVs reach parity with internal combustion vehicles? KraneShares Anthony Sassine says they are close to parity now. He also believes EVs will completely replace internal combustion engines at some point.
Electric vehicles are an undeniable trend. During the coming years, expect to witness an historic transition from internal combustion to electric vehicles. However, there are many questions yet to be answered. Will countries build the needed infrastructure (ex: public charging stations) to catch up to the demand for EVs? What happens if the electric grid becomes overtaxed? Will hackers target the power grid leading to an increase in cybercrime? Despite the questions, EVs are clearly here to stay. At least for the foreseeable future.

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