Exciting Future for Electric Vehicles: Half of New Light Vehicles Will be Electrified by 2026
Could Right Now Be the Time to Invest in EV Technology?
Time is running out for gas-powered vehicles. As governments worldwide adopt ambitious carbon emission targets, automobile manufacturers have been faster than many expected to pivot their plans for future Electric Vehicles production targets.
This week Honda announced that it would begin phasing out combustible engines, aiming for a 100% EV lineup by 2040.
Honda is now the fourth major automaker to announce plans to eliminate diesel and gas-powered vehicles from their lineup, joining Jaguar, Volvo, and GM, who hope to be emission-free by 2025, 2030, and 2035 respectively.
This is especially good news for the future of electric vehicle battery manufacturers, like Extreme Vehicle Battery Technologies Corp. (CSE: ACDC), which stands to benefit from rising demand.
An Electric Vehicle Future Is Coming
The demand for EVs is heating up. While most major automakers currently offer at least one electrified vehicle option, including hybrids, range extenders, and pure electric, future demand for EVs over the next five years is expected to grow at a CAGR of 29%.
In an update to a report published in 2020, BCG recently announced that it anticipates EVs will account for over half of new car sales by 2026 – a full four years earlier than previously forecasted.
According to BCG, adoption will come in three phases. The current early adoption phase, primarily driven by purchase incentive programs, will be followed by a second phase that will see mass acceptance as purchase price and cost-savings advantages of EV ownership become more pronounced. And finally, a third supply-driven phase dictated by widespread availability of EVs and limited ICE options.
With car manufacturers ramping up EV production, it is anticipated that there will be over 300 BEVs and PHEVs models available by 2023. By 2035 zero tailpipe emission vehicles will dominate the market.
Battery Price Is the Key to the EVs Transition
Cost remains the most significant barrier to EV adoption today. A recent study found that while there was interest in electric vehicle ownership, 8 in 10 drivers believe EVs are too expensive compared with similar model gas-powered vehicles.
Currently, the battery is the single most expensive component in EV production, accounting for roughly 30% of production costs, making it the most significant driver for price differences between EVs and gas-powered vehicles.
However, the good news is these costs have been trending down, from close to $1,100/kWh in 2010 to $137/kWh in 2020. By 2023 lithium-ion battery packs could fall to $100/kWh, making the cost to manufacture an EV roughly in line with ICE vehicle production.
EV Battery Stocks: Profitable Investments?
EV battery stocks are ripe for investment.
Over the next five years, we will see dramatically accelerated demand for EVs as production costs continue to decline. And to meet the growing demand and EV production targets, manufacturers will need batteries – a lot of them.
The boom in EV demand will be very good for EV battery manufacturers who have proven technology and production capabilities as they retain a competitive cost advantage over companies looking to break into the market.
Extreme Vehicle Battery Technologies Corp. (CSE: ACDC) is one of those companies.
A leading blockchain and battery technology company, EV Battery Tech manufactures revolutionary, patented Battery Management Systems (BMS) designed to meet the exponentially growing demand for scalable, smart solutions for the rapidly growing Electric Vehicle (EV) and Energy Storage Solution (ESS) markets. Currently, ACDC has first exclusive rights as battery supplier to Daymak, a leading Canadian LEV manufacturer.
As evidence of their performance in battery technology, the company was recently added to the HAN-GINS Tech Megatrend ETF (LSE:ITEP, NYSE:ITEK), a technology-focused EFT with a portfolio of some of the most popular and up-and-coming companies in the technology, blockchain, and EV battery sectors, including Plug Power Inc (NASDAQ: PLUG), Tesla Inc (NASDAQ: TSLA), Hive Blockchain Technologies Ltd. (TSXV: HIVE) and Apple Inc. (NASDAQ: APPL).