The tipping point for will not be some technical advance or killer new model. It will be the moment when one or more of the legacy automakers decides to convert its EV program from an R&D project to a profit center.
Automakers are competitive, and they constantly battle for market share. Each tries to develop, and guard, a “competitive advantage”—some niche in which it beats the competition. Ford has its trucks, Toyota has its hybrids, Subaru appeals to cold-weather drivers, etc. One of these days, hopefully soon, one of the big brands is going to decide that it wants to be the king of EVs.
Of course, several of them have announced plans to take the crown, but as long as they’re still producing, and advertising, gas-burners, such regal ambitions are so much hot air.
Tesla has several competitive advantages over the legacy brands—superior battery technology, a gold-standard charging network, a unified computer architecture, a fast-moving corporate culture, and, not least, a public image that embodies modernity and disruption. To a greater or lesser extent, all of these advantages stem from the fact that the company doesn’t have try to sell two competing powertrains, and doesn’t have legacy products or soon-to-be-stranded assets to defend.
The brand that would be king will have to storm Tesla’s moat and not look back. It must cross (or in Jeep’s case, electrify) the Rubicon, burn its bridges, make it a true Daily Double. It must declare something like this: “When you buy an EV from us, you’re getting 100% of our technology, 100% of our manufacturing expertise, 100% of our customer service.” It must point out the superiority of EVs in no uncertain terms, telling auto buyers: “Do not buy an old-fashioned fossil vehicle. Buy today’s technology. From us.”
This is a bold step that, for all their press releases about grandchildren and butterflies, none of the legacy automakers have yet shown any inclination to take. The first company to do so will gain a huge splash of publicity, and a major (if temporary) competitive advantage. Which one will it be?
The Volkswagen Group might seem to be the leading contender at the moment—it has a growing stable of EVs across several brands, it is converting several factories to EV-only production, and it has the wind at its back thanks to the EU’s increasingly stringent emissions regulations. However, there's also a strong anti-EV contingent in Germany, which fears that electrification will lead to job losses. Pro-EV CEO Herbert Diess appears to have narrowly held onto his job after a recent boardroom power struggle.
A healthy competition is ramping up between Ford and GM—each has recently announced a major new package of investment in electrification, and each has an electric pickup truck in the pipeline. Like VW, both of the American giants are working to develop a domestic supply chain for EV production, including raw materials, battery cells and recycling.
Above: Toyota looks to be finally committing to electric vehicle future (YouTube: CNBC Television)
Possible dark horses include Stellantis and Toyota. What? The company that runs anti-EV ad campaigns, lobbies against government support for EVs, and even hands out books containing anti-EV propaganda to schoolchildren? These two firms may seem hopelessly stuck in the 20th century, but in fact, cooler heads at both Toyota and Stellantis have been quietly developing new electric technology, even as their CEOs publicly bad-mouth EVs. Both are giant companies that have the technical and financial resources to dominate their respective markets if they do decide to make a 180-degree turn.
Bringing up the rear in the EV race are Nissan and BMW, both smaller producers that were early EV pioneers, but later lost interest. BMW has a long history of making technical advancements very slowly and cautiously—it took five years to progress from the Mini E pilot to the i3, which hit the road in 2014, and has introduced no new EV since.
My personal hot tip? Keep your eye on Hyundai. Over the past 24 years, this Korean automaker has evolved from a purveyor of low-priced, mediocre transportation into one of the industry’s most respected brands. Hyundai and its sister company Kia currently offer perhaps the best value for money in the auto world. More than any other non-Tesla automaker, it seems to understand the critical importance of efficiency (which translates directly to lower emissions and lower fuel costs).
According to Carbon Counter, the 2020 Hyundai Ioniq Electric was the lowest-emission vehicle on the US market, and one of the cheapest plug-ins on a total-cost basis. Tesla’s Model 3 just barely edged it out for the title of most efficient.
The new Ioniq 5 is built on a dedicated EV platform, and it offers cutting-edge features even Tesla doesn’t have—it supports bidirectional charging, and both 400-volt and 800-volt charging infrastructures. Early reviews have been glowing.
Most telling of all in regards to our thesis, Hyundai recently made history by becoming the first automaker to cease development of new ICE technology. Employees working in Hyundai’s engine development division have been reassigned to the company’s electrification design center. (In a development that may or may not be related, Hyundai also suspended work on its Genesis fuel cell vehicle.)
Will Hyundai/Kia be the first to take the next step, and stop producing and advertising fossil-burning vehicles? Or will some other automaker be the first to take the electric plunge? Whatever company decides to seize the historic moment, others will surely follow. Then and only then will the end of the Oil Age truly be in sight.
Written by: Charles Morris