5 industries poised to take off as automakers go electric

  • The electric vehicle space goes far beyond selling cars.
  • A multitude of industries are preparing to support and enable the transition to electric.
  • Experts say these five breakout companies present opportunities for newcomers to the industry.

The electric vehicle space isn’t just about selling non-gasoline cars.

To be sure, historic automakers and startups are banking on selling electric vehicles – even without major signals yet that electric vehicles are going to spread, especially in the United States – and have invested billions of dollars in R&D to electrify their markets. future product lines.

But many new businesses will be needed to support the transition to electrification, leaving plenty of room for potential entrepreneurs to tap into the industry. From supply chain solutions to brand new consumer services, investors can take advantage of new industries adjacent to EVs that need a lot of funding and are still up for grabs.

“A lot of people, especially venture capitalists, are asking the same question: We missed the Tesla and the Rivians of the world, but what’s next?” Asad Hussain, senior mobility analyst at Pitchbook, told Insider.

We spoke to four experts from the five leading industries in the electric vehicle space that have just come to life.

Battery recycling

Battery recycling is a key area full of opportunities for those looking to take advantage of the burgeoning electric vehicle industry without the details of vehicle manufacturing.

The battery recycling market is expected to grow from $ 2 billion this year to $ 27.3 billion in 2030, according to PitchBook.

Ford’s focus over the past two weeks has been on the use of second and end-of-life batteries. The automaker’s recent $ 11.4 billion investment in electric vehicles, made with battery partner SK Innovation, accompanied the news that it had also invested $ 50 million in the vehicle battery recycling startup. Electric Redwood Materials, which is headed by Elon Musk’s former right-hand man at Tesla, JB Straubel.

“VCs are really focused on the choices and shovels of future mobility,” Hussain said. “Battery recycling is an important part of it. How to close the loop? We need EVs, but in order for us to have EVs, we need a truly sustainable EV supply chain, or what’s the difference we’re really making? “

Recycling batteries is essential for several reasons. The raw materials needed for electric vehicle batteries are in limited supply. They are also expensive to mine and often mined using questionable labor practices. And the extraction of these materials is usually done in an unsustainable way. Recycling will be key to reducing supply chain challenges, unethical mining practices and environmental damage that accompanies the manufacture of electric vehicle batteries.

“We have this supply crisis coming,” Hussain added. “Recycling batteries could be an important way to increase this supply chain and actually increase capacity so that we can meet our targets.”

Next Generation Battery Technology

New battery chemistries could help make electric vehicles more affordable and faster. At the same time, improving the energy density of a battery with new materials or chemistries can boost a vehicle’s range, alleviating another consumer concern about electric vehicles.

Earlier this week, GM announced plans to build a new research center to experiment with new materials to make their batteries more efficient and ultimately lower costs.

Meanwhile, startups like Sila Nanotechnologies – led by former Tesla Gene Berdichevsky – Israeli battery company Addionics, and the Massachusetts Institute of Tech spin-off SES are just a few of the players tapping into this industry. relatively recent.

“The battery, in today’s numbers, is an $ 18,000 tank of fuel,” said Russell Hensley, a senior executive in the global automotive and assembly practice at McKinsey.

“We are in the lithium-ion era for the next few years,” he said. “At some point do we go solid – or do we? It’s kind of an open question because there are other competing technologies chomping at the bit.”

FILE PHOTO: Nissan signs can be seen outside a Nissan car dealership in Broomfield, Colorado, October 1, 2014. REUTERS / Rick Wilking

Electric vehicles mean new business models, new sales opportunities, and a whole new dealership industry could emerge in the years to come.


Dealer business models

As electric vehicles – and all parts of their development, manufacture, and production – evolve, so too must dealers looking to sell them.

The enthusiasm of EV startups for direct selling models doesn’t mean the old dealer model is out.

“They have a very important role to play,” said Martin French, managing director of Berylls Strategy Advisors, of car dealerships. “If someone walks into a showroom and says, ‘I want a new F-150. Will it be an internal combustion engine or will it be the F-150 Lightning? “I think the dealership can play a huge role in terms of consumer education.”

This means that new business models, new sales opportunities and a whole new dealership industry could emerge in the years to come.

“The dealership should also look for smart ways to stay in touch with their consumer, whether through installing home charging or through routine data collection or how they can serve their consumer,” French said.

Supply Chain

Broad automotive supply chain updates will be needed to account for differences in manufacturing gasoline-powered versus electric vehicles.

For example, GM this week announced an agreement with GE Renewable Energy to develop better supply chains for the materials needed to make electric vehicles.

Such changes open doors to new suppliers who can adapt to the changing needs of the industry.

“As we start to see the adoption of electric vehicles, which I think will increase rapidly during this decade for a variety of reasons, we will start to see the pressure on the supply of raw materials,” said Sagie Evbenata, senior research analyst in energy, sustainability and infrastructure at Guidehouse.

“It is one of the concerns of the industry, to be able to have a reliable supply of raw materials, also coming from a sustainable source,” he added. “Now new suppliers will come into play.”

A map of charging stations displayed on the FordPass app.

Another opportunity for newcomers to the industry who want to play a more consumer-centric role in enabling EV adoption is in charging network platforms.


Platforms and customer services

At present, few customers know the charging networks, the types and costs of charging, or how to find an outlet. This presents an opportunity for new entrants to the industry who wish to play a more consumer-oriented role in enabling the adoption of electric vehicles.

Charging experiences can be “hit and miss” for customers, experts say. It’s hard to make sure a public charger isn’t busy before showing up and making sure the equipment is working properly, Guidehouse’s Evbenata said.

“Much of this is still not so clear to the customer,” Evbenata said. “There could be a lot of things in terms of improving the information collected from the different networks and the charging equipment themselves, and providing the platforms used by drivers.

“These platforms exist,” he added, “but so far none are truly exceptional. They will have many opportunities for improvement and market share.”

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