The CES technology conference in Las Vegas in January 2022 displayed the massive and rapid transformation underway in automotive manufacturing. Leading combustion engine makers—such as General Motors Company (GM), Ford Motor Company (F), and Stellantis N.V, (STLA)—lined up new electric vehicles (EVs) in a race to be first in the emerging EV market.
The face-off between GM's all-electric Silverado and Ford's F-150 Lightning in the truck market showed that the competition is heating up. In the luxury car market, EV adoption is also rapid, with Volkswagon AG (VWAGY) planning its all-electric Audi SUV, e-Tron. The company has also partnered with Bayerische Motoren Werke AG (BMW,DE), and Daimler AG (DAI.DE).
- CES is showcasing a rapidly transforming automobile industry gearing up to adopt electric vehicles (EVs).
- A $515 billion spending plan by several leading global automakers is a key catalyst for the transition to EVs.
- New emission rules and international consensus also drive EV adoption.
With the massive investment plans of $515 billion by several leading global automakers to facilitate the transition, the EV market is becoming crowded. Ford and GM plan on spending $60 billion through 2025, while Volkswagon, BMW, and Daimler together have a $185 billion budget through 2030.
Even companies that have not been manufacturing cars are joining the fray. Sony Group Corporation (SONY) recently announced that it plans to make its own electric vehicle.
There is a growing international consensus with regards to limiting fossil-fuel engines. In the U.S., President Biden wants 40% to 50% of new cars sold to be electric by 2030. Sweden, Singapore, and other countries also have plans of imposing bans on the sale of new combustion engine vehicles by 2030.
The new tailpipe emission rules, the mercurial growth of Tesla, Inc (TSLA), and other regulatory restrictions are aiding a gradual phase-out of gasoline and even gasoline-electric hybrid vehicles. Even the most traditional automakers do not want to be left out of this tremendous growth story.