Four Advantages Of Manufacturing EVs Over ICE Vehicles

AWD Tesla Model 3 being built in a tent


Here are four distinct advantages that manufacturing EV has over manufacturing ICE vehicles.

Three motors 30 power configurations

The first great advantage that electric vehicle manufacturers have is the simple and yet powerful flexibility inherent in electric motors. A four-wheeled EV can have one, two, three or four motors. Multiple motors can work in tandem or power up each of the four wheels independently.

This gives the manufacturer the ability to offer multiple power options while only having to engineer, design and build a few motor types. An electric car manufacturer could engineer and build only three motors and yet, with only a little additional engineering, offer up to 30 different powertrain variants (not to say that all 30 would necessarily be optimal or offered, but it is possible). A traditional ICE manufacturer would be required to incur the cost of engineering and building many more engine sizes (horsepower ratings) in order to compete. Each IC engine would require its own manufacturing and assembly line. On the other hand, an EV manufacturer enjoys the simplicity of design and great economies of scale because it is producing many units of the same few motors.

The EV world is shying away from the term horsepower, and for good reason: See JB Straubel’s article: “Tesla All Wheel Drive (Dual Motor) Power and Torque Specifications.” However, for simplicity of explanation I will treat electric horsepower as if it were stable. An EV manufacturer could, for example, have three motor sizes 160 HP, 200 HP and 260 HP and yet be able to offer one vehicle with 160 hp, another with 360 hp, another with 520 hp, and yet another with 1040 hp, as well as many other possible powertrain variants.

This inherent simplicity of being able to build only a small number of motor types while being able to customize multiple powertrain outputs is a powerful advantage to EV manufacturers.

Streamlined, simplified powertrain

Another, more obvious, advantage EV manufacturers enjoy is working with a streamlined, simplified powertrain. A BEV has a much simpler powertrain compared to an ICE vehicle. The transmission is much simpler and more compact. Power can be placed closer to the wheel or wheels where traction is needed. And, EVs do not need mufflers or other exhaust systems.

This should give EV manufacturers the ability to reduce overall manufacturing costs over time.

No worries about emissions regulations

Another big advantage EV manufactures have is not being constrained by current or future governmental emissions regulations. An EV manufacturer does not need to worry about tailoring its product-offering to fit within some government specified emissions regulations, not now, nor in the future.

EV manufacturers can freely design and build vehicles in any shape, size, or configuration they desire according to market interest and demand.

More profit to the manufacturer

A final great advantage EV manufacturers can currently enjoy is greater revenue (and potential profit margin) on each vehicle sold. EVs can, at present, command a premium price over their ICE counterparts because buyers know that they will be spending less on fuel, maintenance and mechanical repairs. This means that instead of revenue flowing to a gasoline company, a lube shop and an auto repair shop, that revenue flows directly to the EV manufacturer, allowing for higher margins.

The fact that the vehicle is electric means that it can command a $3 – $6,000 premium (or more) than its ICE counterpart. This shifts more profit from other market players and directly to the manufacturer. And, over time, as associated costs of EVs are reduced, this greater potential profit margin will continue to increase or, at the very least, stay the same as lower cost versions of EVs are introduced.

So, EV manufacturers can realize a greater gross profit margin on each vehicle sold compared to their ICE counterparts.

For all these reasons it is clear to see that now is a great time to be an EV manufacturer. Perhaps this is why VW group, GM and others are joining Tesla in pushing the sustainable transportation revolution forward.

Categories: EV Education, General, Tesla

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48 Comments on "Four Advantages Of Manufacturing EVs Over ICE Vehicles"

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Great article Geoff Shelley! New writers welcome!

“The EV world is shying away from the term horsepower, and for good reason: See JB Straubel’s article: “Tesla All Wheel Drive (Dual Motor) Power and Torque Specifications.” However, for simplicity of explanation I will treat electric horsepower as if it were stable.”

Stable. There is a pun hiding there.

Horsey Pun Hiding , Yea When The Horsey is Stabled it is Hiding and Makes Less Horse Power Because the Horsey Is Now at Rest … R O T F L M A O ..* 🙂 *.. Gotta Keep That Horsey Moving …

LOL, Thanks for your comment. Funny, I didn’t even think of that when writing, but you’re right.

The last point is only transitionally true. A premium price is acceptable now, because buyers are particularly motivated, and there are few EV options to chose from. That will not be the case in the near future. And, already now publicly recharging an EV is more expensive than an ICE car per unit of energy. As well as, pretty soon governments will find new ways to recover the tax money included in the price of fuels.

If you charge at home, you’re paying a tax, it’s just not allocated to highways.

You pay state and local sales taxes on the electricity used to charge at home. For gasoline, you pay not only state and local sales taxes, but also state and federal fuel taxes. That’s a big difference.

Federal highway funds are allocated to states based on the amount of federal fuel tax within each state. Since EVs don’t pay any federal fuel tax, states get short changed out of their fair share of federal highway funds.

Tax the crap out of ICE car, thanks.

Yeah…this isn’t rocket surgery. I keep hearing idiotic ideas like putting trackers on vehicles and paying per mile traveled, or not quite as dumb (but pretty close) annual registration fee for EVs. Tack 50 cents/gallon federal tax on and use the money to build good roads, pay for EV infrastructure, and EV incentives. Greater EV adoption drives gasoline usage down so that even with extra 50 cents it isn’t enough? Great, put another 50 cents on. Rinse/repeat. Using the concept of ‘fair’ (a four letter f word that I don’t let my kids use) to even out gasoline vs electric car taxes for roads is the exact opposite of incentivising EVs. By that standard we shouldn’t have any policies at all that spend money on EVs, especially tax credits since those aren’t ‘fair’. 20 years ago or so John McCain was pitching a $2/gallon gas tax. Wish that idea had caught on.

read my posting above yours.

Rinse/repeat, LOL. That certainly would push EV adoption! Probably not going to happen though.

I am trying to get Colorado Democrat reps to push for trading the $7500 EV subsidy for raising gas/diesel fuel tax by .01/gal/month for 50 or even 100 months. Require that gas tax go to the state where collected and all of these tax go ONLY to infrastructure.

Down the road we will need to address EV taxation, but that is a different issue.

so many things false there.
1) in Colorado, we pay $50 / year/EV, but it it about to go up to 150/year (and it should).
2) the DOT taxes are not enough and much of it is NOT going to DOT but general funds.

More to the point, this extra premium is taken up by the price of the battery. Not extra profit for the company.

Thanks for your comment! Somewhat true. But for at least one manufacturer battery costs have come down and it looks like they will continue to come down (see: Tesla Buying Maxwell, Could Signal Move To Solid State Battery) to the point of nearing the cost of ICE powertrains, meanwhile in the near term the premium will still be in force.

“I pay about 2.5 cents per mile to power my Tesla. I challenge you to get anywhere close to that with an ICE.” Please STOP being ignorant. Gas prices in Japan, Europe, etc costs the most in the world. We don’t pay the most per gallon (liter in metric) in the US, but for a long time the rest of the world hated the US because we were about 5% of the world population but used 25% of world “energy” production [energy is in quotes because it is being used loosely here]. The current price of gas in Saudi Arabia is roughly $0.54 per liter (was way cheaper when I first discovered how US as a country was an energy pig with big SUV’s!). In some other places, the price of gas is much cheaper. Source: It cost roughly $0.34 per liter in Kuwait. It’s roughly $0.13 per liter in Sudan. It cost even less in Venezula. Btw, here is website showing historical cost of gas per liter in Saudi Arabia It was as low as $0.16 per liter. In summary, cost to power one mile is based on two main factors: mpg & cost per gallon or… Read more »

If you wish to push the middle east prices, you should know that those are heavily subsidized.
IOW, that is NOT their real costs.

Why does ignorance run rampant on this site?
We have ppl that present heavily subsidized fuel prices as being the real price.
Then we have idiots that claim that CHina is cleaning up their air, while ignoring the fact that they continue to not just add more coal plants, but are adding 2x as many coal plants as America has. And all by end of 2020. These are NOT replacements, but additions.

Such a lack of logic and intelligence on all these issues explains why the CO2 continues to rise.

So I charge for free at work. I have solar on my home and actually get a credit for my true-up each year. I wonder what my cost per mile is? 🙂

I think you ment: 3 EV lifetime cost of ownership = 1 ICE lifetimes cost of ownership.

How exactly is an EV paying more per unit of energy than ICE?
Diesel/Gas used a ton of electricity just to be distilled from oil.

Thanks for your comment. I think you are correct about the premium being transitionally true. But for slightly different reasons. I suspect that it’s not so much about the number of EV options available on the market as it is the total number of EVs in the market. Once adoption hits somewhere above 50% the EV savings card will not be as easy to play. Competition will push prices down, and by then advancements in battery tech, etc, should make it possible for manufacturers to do so. And yes, governments will have to figure out new ways to take our money – oh, I mean provide funds for roads and infrastructure. ;o)

competition will drive prices lower, increase quality, and increase the features in EVs. Only when there is little to no competition can prices remain high. Which is why the notion of nationalized healthcare, or anything for that matter, makes no sense.

“Which is why the notion of nationalized healthcare, or anything for that matter, makes no sense.”

Healthcare is not a product, like a car or a smartphone. Enjoy your “competitive healthcare”, it costs twice as much and offers you only half the services.

“Healthcare is not a product, like a car or a smartphone.”

Healthcare a product. You buy different healthcare plans, with each plan being a separate product.

Healthcare may not be a “physical” product, but it is a product nonetheless as defined by business providers and marketing folks.

healthcare != insurance.

That’s just an American bastardization of healthcare down here. We treat healthcare as as an “industry” while many civilized nations treat it as a “service” … that distinction results in a major evolution of how things work.

One system is working to optimize itself for profit, the other optimizes itself for accessibility.

The American healthcare system is not so kind to those who can’t afford it, and the benefit caters to insurance providers rather than patients.

Healthcare in the US, the land of “free market” and competition, is the most expensive in the world.
Its also not ranked among the top healthcare systems in the world (which are all countries with in “nationalized healthcare”).

Thanks for your comment. True, over time as EV adoption becomes somewhere above 50% I think we can expect it to become harder for manufacturers to play the EV savings card and with tech improvements I think we will see competition drive prices down. But for now that premium price stands and I suspect will until adoption is more widely spread.

Nice rose-colored glasses fluff piece. Stating the obvious, ignoring the high cost of batteries. No new information.

Thanks for your comment. Mostly I hope that the three motors 30 powertrain configurations is very obvious to JB Straubel and the other tech/design team members at Tesla, as well as to other EV manufacturers!

What’s going to happen to dealership profit when they figure out that no oil changes is the least of their problems. Low maintenance is an understatement. I’ve owned an EV since 2013 and I’ve seen the dealer once for a warranty issue.

They will find most of their work becoming wheel bearings, suspension and steering components rather than belts, head gasket and engine electrical work.

Thanks for your comment. YOU GO!!!

ICE manufacturers already manufacture a basic engine, that can have 30 or more variants by simply adjusting stroke, and bore. The VW E888 motor is an example of that. This engine has great flexibility with one engine type that have tweaks for different applications, and emissions requirements.

You can also slap a turbo onto any engine to add horsepower.

Thanks for your comment. Hmmm, didn’t know that. Thanks. But I would suppose that getting from a 160 hp engine to a 640 hp engine would take quite a bit more than simple adjusting. (Something that could be done by combining four 160 “hp” electric motors.) Let me know if I’m wrong about that.

1, 2, 3 or 4 motors is a very important fact.

How about adding a motor into 2 axles and also a motors into 4 wheels for 6 motor for massive power in a sport vehicle or heavy truck.
A vehicle with fast pickup commands a massive premium over a slow vehicle, this is another big advantage for EV.
And what about 120 MPGe which is 3 – 4 fold increase in efficiency over an ICE.
Trains use electric power for fast pickup and efficiency.
Lets go electric and if not at least a plugin with 50 km range.

BTW we should get rid of the clumsy terms like hp, bhp and replace it with KW. Horses are long gone.

Thanks for your comment. “Horses are long gone” LOL, True. If you read JB’s article it’s clear why moving away from that term is appropriate. But it’s a term that people are familiar with and can easily relate to (for now).

EVs can have 1, 2, 3, 4, 6, 8, etc etc motors. You can have more than one motor per wheel.

Thanks for your comment. True, but more than one per wheel gets more messy and complicated. I don’t know at what point at some number there would be diminishing returns because of complexity.

One huge disadvantage is the massive loss of revenue by car dealerships as the maintenance required is so much less. oh wait…

Thanks for your comment. LOL

Personally I think it’s great Tesla is joining Nissan in pushing the affordable EV revolution forward.

Thanks for your comment. LOL. First movers aren’t always the winners in the end (think yahoo vs google). Truth is it’s not impossible that some new startup could come along and kick Tesla out of the game.

One important thing that only motors can do: Each motor can spin at different speeds and accelerate and decelerate independently. When negotiating a curve, we could have millisecond differences between when front motors brake and accelerate and the rear motors. That is impossible to achieve with the transfer case and the limited slip differential smoothly.

With four independent motors we could steer the car purely using torque, torque vectoring! This is impossible with ICE cars.

Thanks for your comment. True. I understand that Rivian is taking advantage of this idea.

Do Not Read Between The Lines

Manufacturers are manufacturing to meet mandates in CARB states and China, and tailor their specs to get the maximum credits (4 in CARB, 6 in China).

Thanks for your comment. True most of them are. Tesla and the other pure EV startups are the exception (though Tesla has certainly benefited from the sale of credits). I just wanted to give the benefit of the doubt and say something nice (“if you can’t say something nice ….”).