The market for future EVs is growing, and as the world prepares to slowly phase out fossil fuel-based vehicles, it is not wrong to assume that electric vehicles will be the future. Mercedes Benz CEO Ola Kallenius believes that the change is now and that luxury customers will want to transition in the near future rather than wait longer. He shared this during an interview with CNBC’s Jim Cramer. Cramer was recently in the news for inverse Cramer ETFs by Tuttle.
Kallenius is not wrong. The global market for EVs is expected to grow at a compound annual CAGR of 21.7%. By 2035, the largest automotive markets will be fully electric. In the US itself, since 2016, EV sales have climbed by over 40%.
Changing the game one EV at a time
The Mercedes Benz CEO is convinced the transition is already happening as they delivered almost 31,000 EVs in the first half of 2022 alone. Discussing the Munich-based carmaker’s future goals, he said, “When we made up our mind a few years back to go what we call for Ambition 2039, we really first mentally flicked the switch to go all in on decarbonization, Ambition 2039 is all about taking CO2 out of everything we do, the obvious thing is going electric on the product.” Future EVs will help the world achieve net zero emissions.
In the interview, Kallenius also mentioned that Mercedes Benz is looking to position themselves as one of the leading auto manufacturers that can take on the electric market that will be ready by the end of the decade.
The Mercedes Benz CEO is aware that future EVs are where the world is headed. And in keeping with the times, the company will offer all electric models for all its key offerings by 2025.
Governments across the world are encouraging automakers to shift to EVs by offering subsidies and tax benefits. Sustainable mobility is the future and governments are keen to accelerate change. In Europe, over 150 cities have put regulations in place to control pollution and reduce emissions. Many countries also have plans to convert car lanes into bicycle lanes.
Kallenius reassured Cramer that despite Mercedes Benz’s entry into the EV market, the carmaker will continue to up the ante and offer vehicles with excellent performance. Automakers are also trying to keep EVs affordable despite rising battery costs.
The Future EVs Market
Electric vehicles are also gaining favor with consumers as they become environmentally-conscious. In 2021, China was the biggest market for electric vehicles. One out of every two EVs sold in 2021, was bought in China. But Europe is slowly catching up. A Reuters report revealed that in terms of sales per million people and share of existing car inventories, Europe has taken the lead. Future EVs will continue to find buyers in Europe and China.
Nine of the top 10 countries ranked by the share of EVs in the total car stock are in Europe.
Europe’s demand for electric vehicles is set to rise as the block faces the pressures of relying on fossil fuels. The Russian invasion of Ukraine has caused an unprecedented energy crisis in Europe. The eurozone is keen to avoid such situations and has put its plans to shift away from fossil fuels into high gear.
China’s foray into the electric segment was propelled by Beijing’s aggressive policies on energy efficiency and decarbonization. They also built an ecosystem that will foster EV production and an efficient supply chain further cemented its status in the EV market. Although China has the greatest number with regard to EVs sold, Norway, Germany, The Netherlands, and the UK had higher numbers per million people in 2021.
The industry is transforming at an unprecedented speed and looking at current trends Europe could very well emerge as a role model for the world.
