These Are The Challenges Electric Carmakers Face As The Demand For EVs Grow - AllCarIndex
The demand for electric vehicles has been growing for many years now, and it's not slowing down. The market saw rapid growth in 2021, and that's only set to intensify going forward. Tesla's 2021 sales was at $5.5 billion, a more than six times increase from the previous year. Yet, the EV industry faces some pressing challenges that may limit production for this ever-growing demand. These include supply chain issues, a lack of charging stations, and rising costs. In the future, EV companies will need to look to startups to offer solutions. Here's a look at some of the most pressing challenges facing the industry today.
A Tough Supply Chain Environment
The demand is growing, but a waning supply chain threatens future EV production. First, microchip shortages are still causing issues for the auto industry as a whole, not just EVs. It's more of a pressing issue for electric vehicles as they use twice as many microchips as regular cars. In 2021, these shortages caused several EV companies to incur costly delays. In 2022, the microchip shortage is still heavily affecting vehicle production. Unfortunately, these shortages are likely to continue throughout the year as it will take time for Congress to act on the matter.
The prices for EV materials have also risen significantly in recent years. In 2021, the steel price went up 100%, aluminum saw a 70% increase, and copper went up 33%. That affected both electric and conventional cars, but EVs have an additional challenge. The materials used to manufacture their batteries also went up. For the past few years, the price of lithium carbonate has gone up by 150%. These rising costs have made it difficult for EV companies to keep a steady supply of batteries.
A Lack of Charging Stations
There are only a little over 100,000 EV charging stations throughout the United States. That's one of if not the most significant reason holding back more consumers from going electric. If the demand continues, millions of electric vehicle drivers could be on the road without anywhere to charge. Startups have contributed to this problem by developing car charging apps, intelligent chargers, etc. Yet, the issue remains and is affecting further EV production as the country is still finding out how to invest in EV charging stations.
Charging Time Takes Too Long
Lastly, charging time is another issue facing the EV market. A fossil fuel vehicle only takes a few minutes to fill up, which is very convenient. On the other hand, an electric car takes at least 30 minutes - and that's using one of the fastest chargers on the market. There's a growing demand for technology that speeds up the charging process. Until then, many consumers will opt for the more convenient option. Another challenge is that more people wanting to charge their cars will cause a strain on the grid, causing more delays.
While there's a steady demand for EVs, the industry still has a long way to go. Pressing issues such as a lack of charging stations and a challenging supply chain hold the industry back. As we move forward, microchip shortages and rising costs will limit production. Yet, the demand is still there, so the industry will have to adapt and find innovative new solutions to its problems.