The electric car market is expected to overtake combustion engine vehicle sales in another 20-30 years.
Currently, even the lower cost electric cars are still more expensive than similar sized combustion engine vehicles. The upper end of the price range for electric cars is naturally limited by a small market.
The key to growing electric car sales will be tied to lower battery costs, which is starting to take place, along with the development of mass market vehicles. New electric cars are much faster to design and build, given fewer parts needed to operate an electric vehicle.
In addition, VW and GM are starting to develop fast-charging stations in a nationwide network to encourage consumers to confidently drive an electric vehicle almost anywhere. This infrastructure is needed to spur sales and helps address consumer concerns over the limited range of electric vehicles. The overseas markets are likely going to mature sooner than the US market for electric vehicles.
- A Canadian Electric Car Factory – Solo EV
- MECCANICA – SOLO Factory
- The great electric car race is just beginning
This post is based on the Supply Chain Dive article, The great electric car race is just beginning, by Charles Riley, August 2019; the CNN article, A game changer is coming for electric car owners, by Peter Valdes-Dapena, August 2, 2019; and the YouTube videos, A Canadian Electric Car Factory – Solo EV, by DownieLive, February 20, 2019, and MECCANICA – SOLO Factory, by Electra Meccanica Vehicles, December 20, 2018 Image source: Shutterstock / Scharfsinn.
1. Is it better to improve the location and availability of battery charging stations or to invest in new battery technology?
Guidance: Students will likely recommend improving the charging station supply chain as the most immediate payoff. If no student brings it up, the issue of battery replacement costs in several years to car owners should be noted. This may get the students to recognize that improving the charging station issue for now would improve sales but that there must be a balance with improving batteries in the long haul. Companies have to plan on both short and long run needs, and the articles contain rationales for that argument.
2. What impact would a major shift to electric cars have on the supply chain for parts and labor for a GM dealer in the future?
Guidance: Students should explore the changes in labor, supply chain inventory required, speed of delivery of parts, and design of a dealership’s service department. This is a good way to get students to recognize that major industry changes result in impacts far and wide that can be anticipated. Follow up the discussion with a question about what other changes in society may result from more electric cars? Paring electric cars with driverless technology?