High gas prices are causing a rise in EV orders, revealing an industry that is not ready to meet global demands. The switch to green vehicles has always been a road filled with obstacles. In its early days, the fossil fuel industry blocked and pressured the green EV movement to prevent it from taking flight.
Today, most big car brands have not only embraced the all-electric mobility trend but have also released EV lineups and models to conquer the market. However, new obstacles have emerged such as inflation, the ability to scale up, supply chain problems, chip shortages, and difficulty sourcing elements for lithium batteries. Despite this, car brands are racing to ramp up their EV production.
In a recent Tweet, Elon Musk said that Tesla is focused on “scaling to extreme size” as part of its Master Plan 3. Recently, Tesla saw weekly orders increase by 100% due to high gas prices. To meet the demand and increase in costs, Tesla raised prices for the second time in one month. Tesla is now rushing to accelerate production and recently inaugurated its Gigafactory in Berlin. As reported by CNBC, the new Tesla Gigafactory is expected to roughly double its production. Tesla now has four operating plants, with the Gigafactory slated to open this year. Other brands like Volkswagen will invest more than $100 billion to scale EV production. VW also announced a new plant in the U.S. with $7.1 billion in investment. Both are racing to become the biggest EV production companies.
R&D, Production, And Competition
However, there is the question of how will EV makers cope with global demands if a 100% increase in weekly Tesla orders triggered a bottleneck, delays, and caused the price of EVs to rise? The answer is research and development, an increase in production, and competition. Competition is well on its way. There is no way that big car brands are going to miss out on the opportunity to tap into a global market that involves the sale of billions of cars worldwide. VW, BMW, Ford, Hyundai, Kia, Porsche, Mercedes Benz, Toyota, GM, Polestar, and the rest of the big guns already have hundreds of billions of dollars in EV investment, combined. Their all-electric cars are being released at incredible speeds. The industry is also investing in EV plants.
Competition and the increase of production will need to be met with research and development. Innovating in chips can divert the chip shortage and boost production. Investing in research to make manganese EV batteries can also be a game-changer making batteries cheaper and easier to build. Eventually, R&D, competition, and an increase in production will cause EV prices to drop, and the supply will meet the demand. While the EV industry today is nowhere near meeting global demand, it is working its way up, aggressively.
