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Like most parts of the auto industry, the electric vehicle market will take a hit this year as a result of COVID-19.
But according to a research paper released Monday, Sept. 21, by Cox Automotive Mobility, the pandemic will cause more of a “stall out” of EVs than a complete “vanishing act.”
While some experts say COVID-19 has slowed long-term progress related to fully autonomous vehicles — largely because automakers and suppliers need to prioritize other projects in the near term — the industry remains bullish on the development of advanced driver assistance systems and electric vehicles. These investments appear to offer automakers and suppliers a greater and more immediate return than do massive investments in AVs that could be years down the road.
“While we may experience a short-term dip in EV growth due to COVID-19, many factors set a course for a positive long-term trajectory,” Lea Malloy, head of research and development at Cox Automotive Mobility, said in a statement.
One big factor: Automakers are scrambling to meet stricter vehicle emissions targets in Europe and China, as well as in various states in the U.S. — not to mention the billions of dollars in R&D slated for EVs in recent years.
“Some OEMs have literally bet their whole future on these vast investments, making it unrealistic to reel in,” according to Cox.
Some highly anticipated vehicle launches, such as the Ford Mustang Mach-E crossover, are also garnering excitement around EVs, even though other launches — such as those from Plymouth, Mich.,-based company Rivian — have been delayed.
Such delays are one reason another research firm, McKinsey & Co., is less optimistic about the short-term recovery of the U.S. EV market. In a report released last week, McKinsey projects slower electric vehicle growth in the U.S. than in Europe and China.
“The country’s slowing economy during the pandemic and the subsequent decrease in consumer spending are contributing to a lackluster EV market,” McKinsey says.
The company says that in 2022, EV market-share growth in the U.S. may still lag pre-crisis expectations and that as far ahead as 2030, electric vehicles will make up only 15 to 35 percent of the market.
McKinsey says low oil prices in the U.S. make internal combustion engines much cheaper to operate and “the current regulatory environment will provide fewer incentives for purchasing or manufacturing EVs.”
The Cox report acknowledges that the industry must overcome several obstacles to the success of EVs.
“Ultimately, cross-industry collaboration will facilitate EV advancement and consumer adoption,” Malloy said.