The change of paradigm of the automotive industry
The automotive industry is one of the most dynamic industries, because it is driven primarily by the wishes of customers. Over the last few decades, it has been relatively stable, with innovations coming regularly but slowly. In the last decade, and even more intensively in the last five years, it brings even faster and, above all, increasingly unpredictable changes.
A few facts are clear. The future of mobility will be electric. This is what every new car that hits the market or is announced for the next few years tells us. Car manufacturers compete more on the share of electric cars in total sales than on the number of vehicles sold.
Volkswagen sold 6.8 percent fewer cars last year. Importantly, however, it sold 24 percent more electric cars than in 2021. BMW and Mercedes-Benz also reduced sales, by five and one percent respectively. Audi by 3.9 percent. Nevertheless, the brands are not so worried about the decline, if their electric car business is doing well.
Luxury brands more than doubled electric car sales last year, BMW sales reached 215 thousand cars and Mercedes-Benz and Audi reached 118 thousand. Even the goals for 2023 do not predict total sales, only growth of the share of electric cars within the sales of individual brands.
In the transition to electric energy, a change of paradigm is also crucial. The range anxiety is slowly but surely disappearing. Sales are also growing strongly in countries where subsidies are being cut. At the same time, electric car prices are rising more slowly than diesel and petrol cars, meaning that the gap between and between technologies is narrowing. In the upper classes, it actually no longer exists.
In the lower segments, the price of batteries is so high that a cheaper engine and fewer parts of an electric car cannot compensate for the high price. At the same time, the price of batteries went in the other direction for the first time last year. The reason for this is primarily the rise of raw material prices and general inflation on world markets.
Have you ever wondered why small cars do not have a range of 500 or 600 kilometers? The answer is simply because they would be too expensive, they would cost 50 thousand or more euros. Besides, they do not even need such a range for city use. But they will need it to convince also skeptics, who distrust the new technology because of its supposedly limited usage, mostly related to range.
This is also one of the key challenges of the automotive industry. How to finally convince customers that they can live with an electric car every day, without major adjustments. And that of course they are willing to pay a higher price for a car, that they believe it is worth it because of the savings they can achieve due to the lower cost of energy and maintenance. Is it really so? It is, but electricity is also becoming more expensive, the question is how much the prices will increase in the future and how they will affect the total cost of ownership.
The aforementioned obstacles are the key reason why low-end car manufacturers still prefer to deal with the question of how to keep the price low, while reducing CO2 emissions and still make a profit in the end. One of the more popular solutions is the hybridization of classic gasoline and increasingly rare diesel engines.