# Electric vehicles confront the leap to the mass market
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-12-15
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: The Future of Electric Vehicles: What Lies Ahead for 2023?
Meta Description: Explore the challenges and opportunities facing the electric vehicle industry in 2023, from market trends to consumer adoption rates. Stay ahead of the curve
URL: https://financedigest.com/electric-vehicles-confront-the-leap-to-the-mass-markethtml

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By Joseph White

DETROIT (Reuters) – The past year was sobering for investors who poured money into Tesla Inc and rival electric vehicle startups that hoped to emulate Tesla CEO Elon Musk’s success.

As interest rates rose and financial markets gyrated, shares in many EV startups deflated. Rivian Automotive Inc, which had a higher [market value than Ford Motor](https://www.financedigest.com/sales-of-electric-bicycle-motors-market-to-record-exponential-growth-during-2017-2025.html "Sales of Electric Bicycle Motors Market to Record Exponential Growth During 2017 – 2025") Co shortly after it went public in 2021, lost more than 70% of its value over the past year.

Other EV startups fared worse. [Electric van maker](https://www.financedigest.com/lack-of-electric-vans-opens-door-for-chinese-other-ev-makers.html "Lack of electric vans opens door for Chinese, other EV makers") Arrival warned it could run out of cash in less than a year. Lucid Group Inc, backed by Saudi Arabia’s sovereign [wealth fund](https://www.financedigest.com/norway-wealth-fund-employee-sues-for-workplace-gender-discrimination.html "Norway wealth fund employee sues for workplace gender discrimination"), struggled to build its sleek Air luxury EVs. Chinese [Tesla challenger](https://www.financedigest.com/factbox-the-challenges-automakers-and-now-tesla-face-with-humanoid-robots-2.html "Factbox-The challenges automakers, and now Tesla, face with humanoid robots") Xpeng Inc’s shares lost more than 80% of their value.

Now comes the hard part: Persauding more mainstream [consumers to come along for the ride](https://www.financedigest.com/autonation-gets-a-bumpy-ride-as-investors-worry-about-u-s-consumers.html "AutoNation gets a bumpy ride as investors worry about U.S. consumers").

WHY IT MATTERS

The automobile industry is pouring more than $1 trillion into a revolutionary [shift from combustion engines to electric](https://www.financedigest.com/vw-to-speed-up-electric-shift-in-five-year-plan.html "VW to speed up electric shift in five-year plan") vehicles guided by software. From Detroit to Shanghai, automakers and government policymakers have embraced the promise of [electric vehicles](https://www.financedigest.com/tax-credits-for-eu-electric-vehicles-to-dominate-mondays-trade-talks-with-u-s.html "Tax credits for EU electric vehicles to dominate Monday’s trade talks with U.S") to provide cleaner, safer transportation. European countries and California have set 2035 as the deadline for [ending sales](https://www.financedigest.com/eu-approves-law-to-end-sales-of-new-co2-emitting-cars-by-2035.html "EU approves law to end sales of new CO2-emitting cars by 2035") of new combustion passenger vehicles.

Tesla Inc’s surge to become the [world’s most valuable automaker – achieving a $1 trillion](https://www.financedigest.com/deloitte-research-reveals-inaction-on-climate-change-could-cost-the-worlds-economy-us178-trillion-by-2070.html "Deloitte research reveals inaction on climate change could cost the world’s economy US8 trillion by 2070") valuation last year – humbled established automakers such as Toyota Motor Corp and Volkswagen AG that once were reluctant to go electric.

Starting next year, a wave of new electric vehicles from pickup trucks to middle market SUVs and sedans will [hit](https://www.financedigest.com/tech-earnings-hit-pause-button-on-market-rally.html "Tech earnings hit pause button on market rally") the world’s major markets.

Industry executives and forecasters do not agree on how rapidly [electric vehicles could take over half the global vehicle market](https://www.financedigest.com/new-suppliers-race-to-plug-in-to-electric-car-market.html "New suppliers race to plug in to electric car market"), let alone all of it.

In China, the world’s largest single automotive market, [battery electric](https://www.financedigest.com/battery-swapping-spurs-kenyas-electric-motorbike-drive.html "Battery swapping spurs Kenya’s electric motorbike drive") vehicles have captured about 21% of the market. In Europe, EVs account for about 12% of total passenger [vehicle sales](https://www.financedigest.com/musk-says-tesla-price-cuts-triggered-demand-2023-sales-could-hit-2-million-vehicles.html "Musk says Tesla price cuts triggered demand, 2023 sales could hit 2 million vehicles"). But in the United States, EV [market share](https://www.financedigest.com/global-splined-sleeves-market-size-share-trend-growth-forecast-to-2031.html "Global Splined Sleeves Market Size, Share, Trend & Growth Forecast To 2031") is only about 6%.

Among the barriers to EV adoption, industry executives and analysts said, were a dearth of public fast-charging infrastructure, and the rising cost of EV batteries, driven by shortages of key [materials and uncertainty over government subsidies that have buoyed EV purchases in major markets](https://www.financedigest.com/6-easy-ways-to-save-money-with-printed-marketing-materials.html "6 easy ways to save money with printed marketing materials") including the United States, China and Europe.

By 2029, electric vehicles could [account for a third of the North American market](https://www.financedigest.com/opec-meeting-to-take-into-account-market-conditions-iraqi-official.html "OPEC+ meeting to take into account market conditions – Iraqi official"), and about 26% of vehicles produced worldwide, according to AutoForecast Solutions, a consultancy.

[Electric vehicle](https://www.financedigest.com/renault-to-reach-its-goal-on-integrated-electric-vehicles-chain-before-2030-ceo.html "Renault to reach its goal on integrated electric vehicles chain before 2030 -CEO") sales likely will not increase in a smooth, ever-ascending curve, said AFS President Joe McCabe. If there is a [recession next year](https://www.financedigest.com/uk-to-avoid-recession-this-year-but-outlook-still-weak-bcc-says.html "UK to avoid recession this year but outlook still weak, BCC says"), as many economists forecast, that will slow EV adoption.

Wards Intelligence [forecasts that combustion vehicles](https://www.financedigest.com/vehicle-ignition-coil-market-set-to-surge-significantly-during-forecast-period.html "Vehicle Ignition Coil Market Set to Surge Significantly During Forecast Period") will make up just under 80% of North American sales in 2027. Based on automakers’ product plans, Wards analyst Haig Stoddard said at a recent conference that [manufacturers “expect](https://www.financedigest.com/uk-manufacturers-expect-output-to-fall-3-2-in-2023.html "UK manufacturers expect output to fall 3.2% in 2023") strong ICE (internal combustion engine) volume heading into the next decade.

WHAT DOES IT MEAN FOR 2023?

Throughout 2022, established automakers such as Mercedes, Ford and General Motors Co unveiled dozens of new [electric vehicles](https://www.financedigest.com/bmw-invests-1-7-billion-to-build-electric-vehicles-in-u-s.html "BMW invests .7 billion to build electric vehicles in U.S") to challenge Tesla and the upstarts.

Mass [production of most of these vehicles](https://www.financedigest.com/toyotas-nov-global-vehicle-production-rises-1-5-to-record-833104.html "Toyota’s Nov global vehicle production rises 1.5% to record 833,104") kicks into gear starting in 2023 and 2024.

By 2025, there could be 74 different [electric vehicle](https://www.financedigest.com/china-greenlights-audi-faws-3-3-billion-electric-vehicle-venture.html "China greenlights Audi-FAW’s .3 billion electric vehicle venture") models offered in North America, McCabe said. But he predicts fewer than 20% of those [models are likely to sell](https://www.financedigest.com/this-is-the-best-week-for-cash-savvy-iphone-fans-to-sell-their-6s-models.html "This is the best week for cash-savvy iPhone fans to sell their 6s models") at volumes above 50,000 vehicles a year. Automakers could be stuck with too many niche models and too much capacity.

Slowing [economies threaten overall vehicle demand](https://www.financedigest.com/turkeys-economy-grew-7-6-in-q2-driven-by-domestic-demand-exports.html "Turkey’s economy grew 7.6% in Q2 driven by domestic demand, exports") in Europe and China, too.

During the early years of the 20th Century, new auto companies sprang up, [backed by investors](https://www.financedigest.com/glencore-courts-120-teck-investors-for-bid-backing-as-spinoff-vote-looms-source.html "Glencore courts 120 Teck investors for bid backing as spinoff vote looms -source") eager to catch the wave of mass mobility that Henry Ford and other automotive pioneers started. By the 1950s, the global auto [industry had consolidated and once-heralded brands](https://www.financedigest.com/gumgum-announces-industrys-first-100-brand-safe-ad-exchange.html "GumGum Announces Industry’s First 100% Brand Safe Ad Exchange") such as Duesenberg had disappeared.

The next few years will determine whether the [21st Century’s](https://www.financedigest.com/taking-the-pain-out-of-payments-for-the-21st-century-worker.html "TAKING THE PAIN OUT OF PAYMENTS FOR THE 21ST CENTURY WORKER") crop of electric vehicle brands will follow a similar path.

Explore the Reuters round-up of news stories that [dominated the year](https://www.financedigest.com/voice-assistants-set-to-revolutionize-commerce-and-become-a-dominant-mode-of-consumer-interaction-in-the-next-three-years.html "Voice assistants set to revolutionize commerce and become a dominant mode of consumer interaction in the next three years"), and the outlook for 2023.

(Reporting by Joe White; Editing by Bernadette Baum)


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