Amid heightening climate change concerns and technological breakthroughs, the electric vehicle (EV) market is booming like never before. There is much optimism in this space and the industry is set to flourish in the coming years as the future of transportation is green. Solid growth momentum of Elon Musk’s
Tesla
TSLA
, flood of IPOs in the EV market to cash in on investors’ appetite for green cars and increasing efforts by legacy automakers to shift gears to the electric mode validate the fact that the e-mobility space is one of the hottest at the moment, if not the most.
Per a Deloitte report, the EV market is estimated to reach 31.1 million units by 2030 from 2.5 million units in 2020, at a compound annual growth rate of 29%. Also, it is projected that by 2030, China will capture 49% of the global EV market, Europe will account for 27% and the United States will hold 14%.
Amid the encouraging backdrop and prospects, tech majors are striving to gain a solid footing in the thriving e-mobility space. Well, it’s a well acknowledged fact that the tech companies are already quite active in the auto market, thanks to rapid digitization. Amid the changing dynamics of the auto industry and rising popularity of no-emissions cars, tech companies are going the extra mile to tap the EV revolution.
Tech Biggies Muscling Up EV Strength
China-based tech behemoth
Alibaba Group
BABA
, which has long been vying for a slice of the hot EV pie, is leaving no stone unturned to achieve the same. The company recently unveiled electric sedan, in partnership with China’s largest car company, SAIC Motor. The vehicle — launched under the brand IM, which stands for “intelligence in motion” — is jointly built by Alibaba, SAIC Motor and Shanghai Zhangjiang Hi-Tech Park Development, the investment arm of Shanghai’s local government. The Alibaba EV will be powered by solid-state battery supplied by CATL and would feature chips from NVIDIA. Alibaba will start taking orders for the EV in April. Notably, it is also planning to roll out an all-electric SUV in 2022.
Last week, China’s search engine giant,
Baidu
BIDU
announced its intention to form a standalone EV firm in a strategic partnership with Geely Automobile. While Baidu will be providing smart driving software and technology, Geely will be in charge of manufacturing the vehicles. With Baidu already making significant strides in the autonomous vehicle market, the latest move marks the company’s foray into the booming EV market. The hype surrounding China’s EV players like
NIO Inc.
NIO
,
Li Auto
LI
and
Xpeng
XPEV
, along with the country’s ambitious electrification goals are prompting tech giants of China to capture a share in the promising EV market, which is getting more competitive than ever.
Early this month, Taiwan-based iPhone assembler Foxconn inked a deal with a China-based EV startup Byton Ltd to supply the latter with advanced technology required to produce its first model M-Byte by 2022. Foxconn recently collaborated with Geely Automobile to set up a 50:50 JV, entailing the production of whole vehicles, parts, intelligent drive systems, among others, for global automakers.
U.S. tech titan
Apple
AAPL
is also set to make a smashing entry into the electric vehicle segment with a brand new battery technology and plans to deliver its first EV sometime in 2024.Reportedly, Apple’s 2024 production strategy includes a new monocell battery design aimed at reducing the cost of batteries and increasing the range of the vehicle. This battery, LFP — Lithium Iron Phosphate — is less likely to be overheated and will hence be safer than other types of lithium ion batteries. The company is reportedly in talks with Hyundai Motor to manufacture electric cars with driverless capabilities. Apple’s entry into the e-mobility field will make the space more appealing.
Rising Competition to Threaten Tesla’s EV Dominance?
Tesla — which currently sports a Zacks Rank #1 (Strong Buy) — has been riding on its pole position in the EV market, thanks to its first-mover advantage. For years, it seemed that Tesla was the only automaker that was playing at the forefront of the EV phenomenon. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
However, of late, things are changing as various big and small carmakers have started taking the concept of green vehicles seriously from a real-world functionality standpoint. In the recent past, various major automakers including General Motors, Ford, Volkswagen, Daimler AG, BMW AG, Toyota and Honda have revved up their EV goals. With mounting competition in the market and a wave of new models expected to hit the markets in the coming years, Tesla’s leadership in the EV game will be largely put to test.
Importantly, China is Tesla’s fastest-growing foreign market. As it is, China EV players including NIO, dubbed as the “Tesla of China”, Li Auto and Xpeng are gaining wide popularity with their offerings in the home turf. Meanwhile, the central government of China is considering rolling back subsidies that helped drive the nation’s EV market last year.
As if competition from pure EV players and auto giants were not enough, tech biggies are also driving into the much crowded EV lane. With tech giants like Baidu, Alibaba and Apple entering the EV market, competition will intensify further.
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