The Impact of Electric Vehicles on the Automotive Industry: Opportunities and Challenges

It is the time to experience the massive transition towards a greener and cleaner energy source. The automobile industries are one of the top carbon emission sectors in the world.
Introducing electric vehicles in the market has given hope to our society to adopt sustainable solutions. Electric vehicles are energy-efficient, zero-carbon emission machines and, most importantly, cost-effective solutions to future transportation.

However, shifting to the new EV market would be challenging to the established player because now they have to change entire manufacturing units to build modern electric cars.

Moreover, the growing competition has become more difficult for prominent players to turn their actions toward renewable solutions quickly. There are enormous opportunities, but there will be more challenges on the path that every car brand has to deal with.

In recent years, the growth of the EV industry has shown impressive results. Demand for EVs is rising at a sustainable rate. Also, positive word-of-mouth publicity of the EV cars has influenced buyers who were hesitant to buy the products.

The market of EV sales has been projected to grow at a faster rate than expected. As per some reports, the compound annual growth rate of the industry will be around 29% between 2022-30, which will account for over 50% of new car EV car sales by 2030.

Opportunity for Automobile Industries

Automobile industries have no choice but to adopt the innovation. Companies that need to catch up on the transformation will have to face various challenges.

However, the EV market growth has produced many opportunities for the Automobile Industries. We will discuss those pros in the article in detail.

1) Reduce production cost
A core component of EV cars is the batteries and the technology. It doesn’t have an engine, which removes the complexity of building a powerful engine. Once the engines are out of the car, you get the flawless machine that works on low friction.

EV factories could produce highly efficient, faster cars without working on complex engines. It significantly reduces the cost of manufacturing. You can place the battery and commissioned software to run the car. A company can sell the car at a high price and earn a good profit margin from it.

2) High demand
The rising demand for EV cars has given good opportunities to the car industry. Companies that are fast movers in adopting new technology and producing highly efficient cars could not gain a bigger market share and beat the big companies easily.
It is the right time for the small players dealing with stiff competition for decades. They can quickly enter the new market of every brand and acquire significant market share before other brands enter.

3) New revenue source
EV cars are developed to provide a complete entertainment package. While driving a car, you can enjoy your favorite movies, songs, and many more on the touch screen display fixed on the dashboard.

Autonomous EV cars even provide a gaming console for passengers to use in the car. Integrating digital entertainment into the EV car has increased the opportunity for car manufacturing companies.

Now they can enter into a new segment of entertainment where exclusive content will be offered to car owners. It will be another distinguishable feature that makes your car brand unique. A new revenue source can be created on the subscription-based model where companies will keep earning money after a car is sold to the customer.

Challenges of the Automotive Industry

1) Getting New Resources
Established players in the automobile industry must consider developing new factories to produce EV cars. Further investment is needed to acquire land, new technology, machinery, skilled workers, engineers, and a research team. Every car brand must make a big investment to keep their boat floating.
When every other car company is looking for a similar resource from the saturated market, it becomes challenging for the companies to get the best team for the job. Companies must deal with challenges and find the best way to adopt the new technology quickly and start production.

2) Decline jobs
When the car’s major components, such as engines and vital metal parts, are removed from the car industry, there will be a significant impact on the car component manufacturers. Massive job loss will be seen in the industry. EV is a disruptive technology that will affect jobs.

EV companies can operate on a reduced team size. You do not need big-size factories to manufacture the cars. Also, modern factories are moving towards automation; thus, job seekers will need help finding opportunities in the automobile industry.

Conclusion

Automobile industries must deal with new challenges and quickly adopt the new border to stay relevant. Rising competition displays that everyone is trying to get major shares in the automobile industry. Several opportunities come in the way of leveraging brands that are future-ready. Get ready to experience the big transformation in the Automobile industry.