Anyone who has followed the tech industry will have come across the famous Gartner Hype Cycle. This mildly tongue-in-cheek chart depicts the rise, fall, and resurgence of new customer technologies from inception to widespread adoption. Objectivity aside, it’s clear that EVs have lately fallen into the “disillusionment channel,” where so much mainstream technology is failing (when was the last time you used your 3D TV, if ever?). conventional?
First of all, it’s worth explaining how the Gartner Hype Cycle works, for those who are familiar with it. The chart starts with a “tech trigger,” which for EVs would likely be a mix of the Nissan Leaf, Renault Zoe, and (specifically) the Tesla Model S. These cars proved that electric cars can simply be everyday cars. In the case of the Model S, he went even further, revealing that electric cars could be better than internal combustion cars (ICEs): faster. , smoother and with more complex technology. They were not only eco-friendly, but ambitious.
After the arrival of the Tesla Model 3 in 2017, the boom in sales of this car convinced other brands to move to electrification, such as Jaguar with the I-Pace, Audi with the e-tron and Porsche with the Taycan. Added to Lucid and Rivian, they have entered the scene (although both have been around for a while), and electric cars have become the “novelty”. The Volkswagen Group has submitted a large order for its ID car range. Manufacturers have had to switch to electric vehicles or face imminent destruction. The EV market was heading toward the “peak of inflated expectations. “During the pandemic, ever-increasing sales of electric cars made it seem like the format was quickly taking over. Given the evolution of battery prices in 2020, I expected EVs to reach price parity with ICE until 2023/24, especially since the $25,000 Tesla arrived, followed by an exponential decline in fossil fuel vehicles from that point on.
But that clearly didn’t happen. In the UK, electric car sales last month were disappointing. I’ve already explained how “pay sacrifice” schemes give the impression that the majority of electric car purchases in the UK are for fleets, when in fact they are mainly for non-electric vehicles. public use. But it is clear that although sales continued to increase slightly in March, its market share lagged behind the same period last year. Globally, even Tesla had a difficult quarter, with low deliveries in the first quarter for the first time in 4 years.
As I’ve pointed out many times, there’s been a lot of anti-EV journalism lately, with lots of stories about early adopters getting tired of their electric cars and going back to diesels. Generally, the topics of those articles have not given enough idea for their acquisition and now they complain about it because of the clicks. A very loud YouTuber, owner of a Porsche Taycan, complains loudly about the loss of cost of his car. In the UK, many electric cars are in the top ten sensible maximums. depreciated cars (but most notably the Jaguar I-Pace and Audi e-tron, either of which are arguably “next-generation” technologies). There are extenuating things here, which I’ve already mentioned, such as initial price discounts that don’t take advantage of. when calculating price reductions. But more importantly, electric cars were too expensive in the first place, and still are. The electric car has entered the “center of disillusionment. “
With the Gartner Hype cycle, some technologies never escape the fall, for example for the aforementioned 3D TVs, most of which have only been used in non-3D mode. But there are plenty of reasons why EVs won’t possibly get stuck in the hole and will climb up the “lighting slope” to the “productivity plateau. “Previous technologies that have achieved this illustrious result come with the Internet, which withstood the fall of Dotcom and became a ubiquitous and indispensable component of life. Smartphones have arguably never had a downturn, even though several well-known names in the past missed out on the revolution and were left out.
Electric cars will most likely do so for a number of reasons, one of which is inertia. I asked Wayne Griffiths, CEO of SEAT Cupra, about this during a recent roundtable. His company is the Spanish subsidiary of the Volkswagen Group. “SEAT Cupra will not slow down our deployment of the electric car because we have already invested in electrification in Spain as a group,” he says. “Volkswagen has invested €10 billion with SEAT in the progression of the electric platform, the Small BEV, for Skoda, Volkswagen and Cupra, as well as in the electrification of factories here in Spain, in Pamplona and Martorell, and in the structure of a battery factory in Valencia. “
The Volkswagen Group knows that less expensive electric cars are key to wider adoption, which is why it introduced the ID. 2All last year.
“So we’re all committed,” Griffiths says. We are invested. Our purpose is no longer to slow down, but to accelerate. And we’re calling on European governments to step up their sales of electric cars by incentivizing consumers, telling them “For them, it’s a component of the solution, a component of the future, and the installation of the charging infrastructure that will make it possible. “
However, the slowdown in sales will have to be countered through more affordable electric vehicles, such as the Small BEV platform discussed by Griffiths, which is the one first introduced in Volkswagen’s ID. 2 around this time last year. The Volkswagen Group will manufacture on this mobile platform at around 25,000 euros, which is the price of the best-selling car in Spain,” he says. “EVs started with a price issue, but that’s becoming now and will change, especially from 2025 when we launch the Small BEV platform. “
European brands are already waking up to the need for cheaper electric vehicles. For example, in the UK, Vauxhall has reduced the initial value of its Mokka Electric by introducing a new Griffin trim level, £7,115 ($9,000) less expensive than the previous one. models, starting at £29,495 ($37,000). Ironically, the decline in the resale cost of existing electric cars entering the second-hand market will start manufacturing them as well.
Tesla’s $25,000 “Model 2” has reportedly been cancelled as the Chinese are said to be making it happen. . . [ ] above.
But the real challenge will come from China. Se expects BYD and CATL to halve the value of their lithium iron phosphate (LFP) batteries by the end of 2024. CATL is the world’s largest battery manufacturer with 37. 4% of the global market, and BYD’s battery division, FinDreams, currently occupies 25. 7% of the global market, so together they control 63. 1% of sales. These price cuts will have a significant impact on EV charging, especially as LFP batteries are temporarily becoming the mobile-type option for lower-charging entry-level models (and BYD’s own cars). Price pressures from China even (allegedly) led Tesla to cancel its $25,000 car, though Musk denied it on Twitter/X.
In other words, talking about the demise of the electric vehicle is premature. People are seeing reality now and we are no longer so excited about electrification that we pay such a high price for this technology. But even if price parity has been delayed, it comes (probably from China), and EVs will then be less expensive than ICEs. After that, lower running costs, either in terms of charging or less need for maintenance, will mean that electric cars will go back up, as we see. more clearly. In the dominant EV markets in Europe and China, electric cars will likely remain the majority vehicle type purchased until the end of the decade.