EV sales have a direct impact on automotive stock prices, especially when those EVs are part of a larger automotive brand like Ford, GM, and Hyundai.
The initial push and boom of EV sales caused many stocks to rise rapidly. Tesla, an electric vehicle-only company, certainly saw this incredible growth. Since that early boom, sales have tapered off. It’s likely the total sales of electric vehicles will be greater at the end of 2024 than they were in 2023, but the increase isn’t nearly as significant as it was for the comparison of 2023 to 2022.
What do automakers need to do to create more EV sales through widespread adoption?
What is widespread adoption?
This term is tossed around, and many assume it’s an understood concept. Widespread adoption of EVs means that these vehicles are considered the most prominent choice for consumers. So far, that’s not the case for any EV. Although electric vehicle sales have increased, this is still only a small percentage of the overall market. Widespread adoption will be achieved when sales are over 50% of the overall market.
Here’s how the automotive industry can push electric vehicle growth:
Raise public awareness
Electric vehicles aren’t new, but many people refuse to take an educated look at them, only focusing on the negative aspects of driving them. If automakers want to increase EV sales, they will need to do so through widespread education, increased dealership offerings, and events. These are only a few ways to raise awareness and show the public a more objective look at what electric vehicles can offer to most drivers.
Improved driving range
The driving range of an EV is still a challenging factor. This has become an even more troublesome area since most EVs only have 70% of the full driving range as the useful driving range. This means a vehicle with a 300-mile driving range only has 210 miles of driving available from a charge. This isn’t a big deal most of the time, but when an EV owner wants to take a road trip, this means stopping more to recharge the batteries, which seriously lengthens the journey.
Charging speed
The length of time it takes to bring an EV battery to 80% of the full charging range is another challenging factor. This is one of the biggest sticking points in terms of EV sales and why many drivers won’t make the switch. The convenience of filling up a gas tank in five or ten minutes is too easy to pass up for an electric battery that takes nearly an hour or more to reach 80% of the full charging level.
Charging locations
You can’t drive more than 10 miles in too many areas of the country without seeing at least one gas station. In some areas, you might be able to see as many as ten refueling centers in a small area. This is not the case for electric vehicle charging stations. The infrastructure isn’t present to support the widespread adoption of EVs yet. Although many EV drivers will continue to use at-home chargers and not public stations most of the time, more public chargers are necessary to convince drivers to switch to EVs.
Price
If automakers want to see EV sales impact their stock prices, the price of EVs must decrease significantly. The high price of electric vehicles isn’t surprising at all. Anytime new technology is added to the market, its extremely expensive. Think about how much people paid for the first flat screen TVs, DVD players, or iPads; eventually, EV prices should decrease or normalize to make them more affordable.
When will widespread EV adoption take place?
Although many governments have mandated expected levels of EV sales over the next several years, if the issues mentioned here aren’t addressed, many drivers will continue to buy gas-powered vehicles. Automakers are working steadily to address these concerns, which means we should see electric vehicles impact stock prices in the automotive industry much more in the future than we’ve seen thus far.
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