EVs are booming. Globally, sales of electric vehicles increased by 3.5 million units in 2023 to a total of 14 million, an increase of 35 percent over 2022. But every market has its own trends: sales in Germany dropped 29 percent year-over-year by March 2024; in China, pure electric car sales are projected to reach 10 million in 2024, about 45 percent of the total market. Then there’s the U.S.: sales in 2023 were 1.1 million, or about 8 percent of the market. Headlines highlight political battles over EV adoption and a boom/bust view—and we’re still seeing consumer hesitation. In the U.S. market, who is driving the industry through these headwinds of change, and who is going to gain the most traction?
If you mention Tesla, you’re not wrong. This juggernaut now associated only with one name—CEO Elon Musk—was actually cofounded by Martin Eberhard, Marc Tarpenning, Ian Wright and J.B. Straubel. Since 2003 it’s been churning out electric cars, starting with the Roadster. It broke the one million mark in 2022 with revenues of $86 billion, placing it in eleventh place worldwide. But competitors are coming for it—and that’s taking a bite out of sales, which sunk 8 percent in the first quarter of 2024. Tesla’s response—price cuts—have squeezed its profitability and stock market valuation. The company’s present capitalization of $580 billion is some 25 percent less than a year ago.
The automaker faces other concerns: an aging product offering that’s solely electric, lacking other powertrains consumers go for, such as gasoline and hybrid. While its supercharging network was seen as a way to overcome consumer range anxiety, Musk recently fired nearly 500 of that division’s employees. What may be its ultimate obstacle is Musk himself. He’s in a battle over a $56 billion pay package, and Tesla’s market share of EVs was down nearly 25 percent from Q1 2022 (75 percent) to Q1 2023 (51.3 percent). Korean competitors Kia and Hyundai are hot on Tesla’s heels, surging with 11.3 percent of U.S. EV sales each.
Here are three companies on the radar, all seeking to make inroads on the U.S. market and, they hope, to eat Tesla’s lunch:
GM was the largest automaker in the world before losing the crown to Toyota in 2008. It began a pivot toward electric in 2014 under the leadership of CEO Mary Barra, who predicted profound, accelerated changes coming to the auto industry. GM’s numerous investments in electrification include a new line of Ultium batteries, a joint venture with LG Chem, beefing up the supply chain, future purchases of clean electricity from wind power, a working agreement to extract lithium from a geothermal brine in southern California, and a partnership to obtain cathode active material for batteries.
The Ultium platform faced production bottlenecks from 2022–2023, and GM sold nearly 76,000 EVs. For 2024 it forecast increased production to 200,000 to 250,000 EVs, along with better availability and affordability. Will they sell? According to Barra, “I think it was over-hyped and now it is under-hyped. The truth is somewhere in the middle.”
The Japanese giant was the seventh largest auto manufacturer in the world in 2023, selling over 4.1 million cars. Of those, 1 million were electrified (including the bestselling CR-V hybrid) but none were fully electric. This year it introduced the EV Prologue and is working on transforming the supply chain. In other words, it’s seeking to change the picture that it’s slow to electrics, while building a core competence in electric powertrains.
It’s going to be a challenge, given that its Anna, Ohio plant is the largest plant in the world for internal combustion engines (ICE). But work is underway, with an enormous retooling project—$700 million on several plants, a $3.5 billion joint venture with LG Energy Solution to build a battery plant near Columbus, Ohio, and an $11 billion investment in building batteries and electric cars in Ontario, Canada.
Musk isn’t the only one with vision and grand ambitions. The founder of Vinfast, Pham Nhật Vuong, studied at a geological institute in Moscow in the 1980s, founded a Vietnamese restaurant in Kharkiv in the Ukraine, then invested in noodle-making equipment before selling the company to Nestlé in the late 1990s for $150 million. His Vingroup ventures (from property development to smartphone manufacturing) made him the richest person in Vietnam by 2015. For Vinfast, founded in 2016, he tapped GM’s Jim DeLuca—who had been EVP Global Manufacturing before his retirement—to be CEO.
Vinfast has an enormous assembly complex near Hanoi, and pivoted from ICE cars (on a platform leased from BMW) to all electric in 2021. Moving into the U.S., it’s planning a mega-factory in North Carolina (praised in a tweet from President Biden). Its Nasdaq debut had an early valuation skyrocketing to $86 billion — a market capitalization exceeding the combined net worth of Ford and GM. The value’s sobered up since, sinking to under $9 billion in June 2024, and sales are somewhat anemic: only 50,000 cars sold since 2021. But it’s still burning through funds at a high rate — and like Honda in the 1970s, may be on its way to greater things.
Over a century ago, there were over a hundred car companies competing to sell horseless carriages—some powered by gasoline, some by electricity, some even by burning coal. When Henry Ford introduced his Model T, most of these went bankrupt. As recently as 1964, 90 percent of cars sold in the U.S. were manufactured by the Big Three: Ford, GM and Chrysler. But as new and established automakers jockey for position, we’re seeing the U.S. market transform once again.
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