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Will Tesla continue to rule the roost through 2021? Finished automobile makers appear poised to go all out this year to prove their competitiveness in the electric vehicle (EV) industry, and the COVID-19 pandemic is accelerating the demise of the internal combustion engine. The key factor will be the success or failure of the dedicated EV platforms that many automakers are planning to unveil this year.

According to market research database EV Volumes, global EV sales totaled over 3.13 million last year. This includes both battery-based and plug-in hybrid EVs. While EV sales increased by around 38%, sales for vehicles with internal combustion engines fell by over 15% from the year before.

The market for EVs will likely grow even more in 2021. The European Commission reportedly drew up plans last month to have 30 million pure EVs on the road by 2030. US President-elect Joseph Biden, who starts his term this year, has also mentioned moving up the timeline for the EV era. China, looking to become the world’s biggest automobile maker, is likely to join the fray as well. Consequently, finished vehicle makers have been forced to focus more on EVs than other future vehicles such as self-driving or connected cars.

Boosted by this market growth, top-ranked Tesla has been making enormous strides. Last year, it sold over 499,550 vehicles worldwide, more or less reaching the pre-COVID target of 500,000. The company had previously sold around 250,000 vehicles in 2018 and 370,000 in 2019, roughly doubling its numbers in just two years.

Tesla’s strategy for this year is to increase production while lowering prices. Analysts say the company has reached the stage of beefing up its economies of scale. The production capacity of its Chinese factory is expected to double this year. Another Gigafactory is scheduled to begin operations in Berlin this July. The company has also been aggressive in its pricing strategy. The price of the Model Y, which Tesla is launching in China this year, starts at 339,900 yuan (US$52,609), more affordable than vehicles in the same class from local automakers.

For other automobile companies, these all read as risk factors. Tesla’s efforts to produce major components in-house has grabbed the attention of parts makers. Tesla plans to establish its own production facilities to produce 100GWh worth of batteries by 2022.

For this reason, finished automobile companies are gearing up for the race in “true EVs.” Companies are poised to release models from EV platforms in the coming year. To date, most companies have relied on internal combustion engine platforms, with engine and drive shaft-based designs that are not suited to EVs.

The Volkswagen Group has drawn the most notice. This year, Volkswagen is launching the ID.4, its second EV from its MEB (modular electric drive matrix) platform. Its predecessor, the ID.3, has been in the running for first or second place in sales in the European EV market since its September launch. Industry analysts say Volkswagen could cement its second-place position if the ID.4 proves successful. According to SNE Research, Volkswagen had a 12.9% share of the EV market for the first three quarters of last year, putting it fairly close behind Tesla’s 17.5%.

The Hyundai Motor Group and Toyota are also coming out this year with their first EVs. Hyundai and Kia are each launching one or more new models this year based on the E-GMP platform. Toyota, which had previously been focusing on hybrids, unveiled its e-TNGA platform late last year. It plans to unveil its first pure EV in Europe within the next few months.

Lee Hang-gu, a senior analyst at the Korea Automotive Technology Institute, said, “There’s a possibility that finished automobile makers that don’t seize the advantage this time around will face an unprecedented crisis.”

“We’re going to need to monitor the competition this year very closely,” he suggested.

By Lee Jae-yeon, staff reporter

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