Porsche has entered the electric car market with their new car the ‘Taycan’. It’s a powerful car with a huge price tag. At almost twice the cost of the Tesla Model S base price, it might be hard to say that Porsche is ready to compete with Tesla on their own turf. Porsche putting this much effort, however, into an electric vehicle can’t be understated. And soon, Tesla is going to be competing with every other car maker in the industry.
As of 2018 the EV cars market is at almost $40 billion. That’s a big number, but nowhere near where it’s estimated to be by 2025: $1.5 trillion . It’s a mind boggling number to think about. Certainly bigger than the entire auto industry in the United States today. To think of what that will mean for the future of the auto industry is hard to fathom.
Tesla, meanwhile, has a head start on everyone as of today. It has multiple electric models on freeways and roads in every major city across the U.S., and they are constantly unveiling new models, including the most recent Cybertruck. They do have their competition though. Nissan has had a very successful run with their electric model, the ‘Leaf’. BMW and Jaguar also have their electric models on the roads today. Toyota’s own hybrid, the ‘Prius’, has been an amazingly successful car. No car has been a more popular choice to own in the peer-to-peer ridesharing scene. Pretty much anyone is has used Uber has ridden in a Prius.
The excitement consumers show for electric cars is evidence enough that this market is here to stay. And more than that, it’s going to just explode. The auto industry has always been huge in size and now that it is incorporating companies that are doing research into solar and battery powered technologies, it’s just an opportunity for people to show their excitement as consumers and buyers of these products. Companies like Porsche, BMW, and Jaguar are recognizing this potential. It’s also quite possible that these higher end luxury vehicle companies are the right types companies to blaze the trail for everyone else. The high initial price tags that these cars are coming out with might be less of a blow to consumers who are used to buying Jaguars and BMWs.
Having more companies enter the electric vehicle market is a good thing. It means more competition and thus more research money going into something that everybody wants. It means that starting today, every new electric vehicle that comes onto the market is going to have some new feature that we have never seen before. It also means that prices will come down very quickly as production of electric cars becomes a bigger and bigger source of revenue. To ask whether or not it is wise for these carmakers to try to get into the electric vehicle market and try to compete with Tesla is probably the wrong question to ask. A more appropriate question would be, given the direction the industry is now taking, how can they afford not to?
“Personal Electric Vehicle EV Cars Market Size is Expected to Exhibit USD 1.5 trillion by 2025,” Market Watch. Published: 09/16/19.