What if people aren't ready to buy them?
The recent crop of electric cars has attracted people in their droves. Audi has already taken over 10,000 preorders for its all-electric e-tron SUV while Porsche has boosted output of its upcoming Taycan to meet expected demand. Of course, we all know how successful Tesla was when it first opened preorders for the Model 3.
Despite EVs rapid increase in popularity, they still represent just over 2% of the global market. So, what if automakers have overestimated how many people will go out and buy their new EV models? Consulting firm Deloitte studied the future demand of EVs to see if automakers may be too optimistic about their supplies.
Deloitte predicts that 21 million EVs will be built over the next decade with prices eventually falling below comparable gas and diesel engine cars by 2024. Even though these estimates predict EVs will be cheaper than their ICE counterparts in just five years, the firm doesn't believe enough people will go out to buy them.
"As manufacturers increase their capacity, our projections suggest that supply will vastly outweigh consumer demand by approximately 14 million units over the next decade. This gearing up of EV production is driving a wide ‘expectation gap’ and manufacturers, both incumbent and new entrants alike will need to adapt towards this new competitive landscape," said Michael Woodward, UK automotive partner at Deloitte.
With nearly every manufacturer eventually planning to build an EV, Deloitte believes "the number of manufacturers is unsustainable.” People may be rushing out to buy the Tesla Model 3, though it is hard to calculate how many of them purchased it because it is an EV, and how many wanted it because it is a cool new car everyone is talking about. As more automakers continue to introduce new EVs into the market, it will be interesting to see how these cars differentiate themselves and whether or not there will enough people ready to trade in their ICE cars.