When you ask most people about the first car that comes to mind when they think of EVs, they probably answer "Tesla." While it's great that at least one automaker has that presence, consumers like to have options—not everyone wants to drive the same NPC-mobile, after all. And while options are great, one country in particular is starting to flood the global markets with low-cost EVs, and the auto industry isn't exactly happy about that.
Welcome to Critical Materials, your daily roundup of news in the EV and automotive tech space. Today, we're discussing Toyota boss Akio Toyoda's outlook on EV market share, China's influx of EVs on the global auto market, and the unveiling of USPS' very first chargers for the post office's new private charging network.
30%: Toyota boss foresees EV market capping out at 30%
Former Toyota CEO and current Toyota Chairman Akio Toyoda has long been a proponent of a mixed-fuel future—hybrids, gas engines, hopefully hydrogen eventually, and more. While the automaker now says it's betting big on EVs, it hasn't always been that way. Now, Toyoda says that he believes EVs will soon begin to hit an unofficial market share cap across the globe.
According to Toyoda, that magic number is 30%. He claims that EVs will be capped, unofficially of course, at around 30% of all new vehicle sales. The rest of the market will be satisfied by hybrids, hydrogen fuel cells, and traditional combustion engines. “Engines will surely remain,” Toyoda was quoted as saying in the automaker's internal publication, according to Bloomberg. And as the news wire notes, it's unclear if he meant cars currently on the road, or always and forever.
It's not clear where Toyoda gets this figure, or if he has a certain date in mind for this cap to happen. However, Toyota CEO Koji Sato has previously said that the automaker expects to sell 1.5 million EVs annually by 2026, and 3.5 million by 2030—the latter would be just around 30% when compared with 2022's global sales volume.
Last year, EVs accounted for around 18% of all new vehicle sales globally. That number is only expected to grow. BloombergNEF, for example, says that EVs will account for 44% of new vehicle sales by 2030 and 75% by 2040. This number, of course, will vary based on country, as some will likely fall behind on existing infrastructure needs.
As an automaker, Toyota has always been fairly conservative with its EV rollout. The brand has been a strong proponent of hydrogen, though it's looking far into the future for the success of FCEVs. Today, it has accepted EVs as necessary to fill the gap between hybrids and FCEVs, but Toyoda says it will never completely fill the world's needs—hence the company's "multi-pathway approach" to the future.
Toyoda says that the infrastructure is one of the largest problems plaguing EV adoption. With more than 750 million people worldwide who lack access to electricity, there will surely be a market where combustion engines continue to exist, however, just because someone has access to electricity doesn't mean that it is reliable, or that the grid can sustain an influx of EVs in a short period of time without improvements. And this is where Toyoda believes there is still room for hybrids, fuel-cell EVs, and traditional combustion-powered cars.
60%: China will rein in its EV export "dumping" problem
Meanwhile, Toyota's probably got a bigger problem across the sea.
Last year, China's vehicle exports rose more than 60%. This sudden boom resulted in China overtaking Japan as the world's largest car exporter, a move that has instilled fear in the auto industry across the globe.
China is the world's largest EV market by far. And it's home to a large number of EV companies that have access to affordable domestic manufacturing and components. This makes it an ideal hub for companies looking to pump out high-tech, low-cost products—and that's exactly what the entirety of the world's auto industry is afraid of.
“My number one competitor is the Chinese carmakers,” said Stellantis CEO Carlos Tavares last week during a media roundtable. “This is going to be a big fight. There is no other way for a global carmaker like Stellantis that is operating all over the world than to go head-on with the Chinese carmakers. There is no other way.”
Last year, the European Commission launched an investigation into this very topic. The commission claimed that China is dumping "cheaper Chinese electric cars" onto the global markets and launched an anti-subsidy probe into manufacturers who are believed to be taking advantage of China's bountiful EV resources.
China's vice-minister of industry and information technology, Xin Guobin, believes that there is "insufficient" global demand for the country's EVs. He also slammed "protectionist behaviors," such as restricting Chinese batteries and EV components in order for vehicles to qualify for the EV tax credit in the U.S.
Guobin also mentioned that the country has taken notice of "disorderly competition behaviors" from some companies and that the government would take "forceful measures" to address EV projects within its borders.
Europe fears that China is ramping up its production far higher than its domestic needs. This would essentially open the possibility of flooding the global market with cheap EVs far quicker than some well-established automakers can ramp up and at a much higher projected volume. And, if the history of solar panels, steel, and aluminum manufacturing repeats itself—could push automakers from across the world under due to the inability to match cost.
Louis-Vincent Gave, CEO of Hong Kong-based finance research company Gavekal Research, says that a price war is nearly inevitable:
The biggest concern is that the market for EVs has quickly become supersaturated and that a vicious price war is just around the corner. Now that automakers have ready access to generous bank credit, the path of least resistance is to try and gain market share and kill off competition by slashing prices and margins.
At the end of the day, competition is good for the consumer. It helps to push innovation and bring down costs. However, there is only so much cost-cutting that can be done before consumers start to notice, especially when the vehicles originate from a country where labor and material costs only have a floor that sits so low.
90%: USPS launches the first EV chargers in its new Post-Office-only charging network
The United States Postal Service has unveiled the very first charging station for its upcoming electrified delivery fleet across the U.S.
Deployed at the South Atlanta Sorting and Delivery Center, the station is the first of many chargers expected to be deployed as part of USPS' $40 billion investment into electrification. In fact, USPS plans on deploying these charging stations at Sorting and Delivery Centers across the nation as it begins to roll out its upcoming next-generation electric delivery vehicles which will enter service later this year.
These particular chargers at the Atlanta unveiling are manufactured by Siemens, however, both Blink and ChargePoint will also supply EVSE for the first 14,000 chargers on USPS' network.
Also touted at the unveiling was a small sample of Ford E-Transit vans which will be used by USPS. The post office will purchase 9,250 of these E-Transits, which are part of a larger commitment of 21,000 Commercial Off-the-Shelf (COTS) vehicles. In all, USPS is expected to deploy a total of 66,000 EVs by 2028.
Postmaster General Louis DeJoy says that the move to electrification and its new vehicle platforms will allow for significant cost-cutting measures and elevate the post office's efficiency.
As we transform our operating processes and invest in new automation, new technologies, and upgraded facilities and vehicles, we will generate significant efficiencies that reduce our costs, slash our carbon footprint, and minimize waste.
USPS' switch to electrification will likely go down as pretty much the perfect use case for EVs, especially with stop-and-go driving patterns. Its next-generation vehicles have been slammed for being only slightly more efficient than its outgoing Grumman LLVs, but it's unknown how its COTS vehicles will fare. The E-Transit, for example, does not yet have an EPA-rated MPGe rating.
USPS expects the first delivers of the NGDV to take place between April and June.
100%: Would you buy a Chinese EV?
Automakers are wasting no time jumping on the EV train. Over the next decade, there will be no shortage of EV options available to consumers. BYD in particular is one of the largest threats to the domestic EV industry, especially as it took dominance over Tesla in the final quarter of 2023 to become the world's largest seller of EVs. Nio and Dongfeng are two other key players, but none are available for U.S. consumers to buy—yet.
That being said, would you buy a Chinese EV if it meant similar quality, had service options, and worked with the existing charging network?
