What electric vehicles are up against in 2022
A high-level overview of the challenges impacting the EV market this year
2021 proved to be another historic year for the supply chain. However, even during waves of disruption, one industry continued to be a top focus for the world—the automotive sector. Even though it has been one of the most hard-hit industries throughout the pandemic, the pressure for advancing technology and the widespread adoption of electric vehicles has never been stronger.
Several challenges will impact the industry this year with the influx of EVs.
Ongoing Component Shortages
The semiconductor shortage hit the auto industry particularly hard. The once-coveted Just-In-Time model put many manufacturers in a dire situation where they simply could not roll new cars off their production lines. As a result, the industry lost around $210 billion in revenue in 2021, according to AlixPartners, a business management consultancy.
Predicting when the component shortage will end is being widely discussed by experts. While it’s uncertain when we’ll see complete recovery and stabilization, the shortage is not expected to resolve any time soon and the auto industry will continue to be significantly impacted.
Meeting the Demand
According to a recent NBC News article, demand for battery-electric vehicles doubled in 2021. Executive leaders among auto manufacturers see this as a “tipping point” for the industry. Demand is only going up. In November alone, global electric car sales were up 72% YoY, reaching an 11.5% share of overall auto sales. BloombergNEF predicts the growing demand could reach almost 60% share by 2030.
It is also important to consider the infrastructure needed to support this growing demand. Charging stations are essential and the need for these throughout urban and rural settings adds another strain on the supply chain.
Around the world, pro-EV legislation, regulation, and incentives continue to emerge amidst the harsh realities of major climate change events. Pressures like the Paris Agreement’s CO2 targets, the Biden Administration’s Build Back Better plan, and new regulation in China are pushing governments to implement legislation and offer incentives in favor of EV models. In the U.S., Biden is pushing for EVs to account for up to half of sales by 2030.
The arrival of new EV startups is a promising sign for the innovation of this market. While a few new companies were introduced in 2021, others will continue to emerge this year, chasing the success of widely known EV-only automotive companies. As a result, long-established automakers will need to speed the development and time to market of their EVs to remain competitive in the dynamic market.
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What’s ahead for the auto industry in 2022?
EV Company News For The Month Of December 2021