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EV Economy
Overview
The electric vehicle (EV) economy represents a future where battery electric vehicles (BEV) are readily used in transportation. Making up less than 1% of the total passenger vehicles in use, BEVs are presented with significant space for growth, while derived demand from EVs would also bode well for batteries and charging solutions. Falling battery costs and improvements in their range make BEVs competitive against gasoline counterparts. Aggressive electrification targets are also expected to drive the demand over the next few decades. If all proposed sustainability policies and electrification targets are met, the number of BEVs on the road is expected to hit around 95 million by 2030 (from around seven million in 2020).
Market Sizing
The US EV economy could reach USD 133 billion–USD 250 billion by 2030
USD 133 Bn
USD 211 Bn
USD 250 Bn
COVID-19 IMPACT
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Strong recovery from the pandemic, with passenger BEV sales increasing by 86.8% YoY in 2021 (from 29.1% YoY in 2020).
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Multiple disruptions to business operations over the past two years due to lockdowns and virus outbreaks.
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Rivian, Lucid Motors, Fisker, Lordstown Motors, and Sono Motors experienced delays in launching new models.
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Volta Charging, Canoo, and Tesla developed new products to combat the coronavirus.
Market Mapping
Seed-stage battery startups and growth-stage charging infrastructure startups most prominent
Battery startups are the most common, with a number of disruptors developing next-gen advancements in lithium-ion batteries as well as solid-state and other lithium-substitutes. Most next-gen battery startups are at the seed stage and their technologies are yet to be commercialized. Charging infrastructure is another segment with strong disruptor presence. Startups in this segment are somewhat mature with most being in the growth stage.
The passenger EVs segment is incumbent-heavy but startups providing differentiated solutions, such as solar EVs and subscription-based payment models, have shown some promise, along with a handful of commercial EV startups. These startups are yet to reach mass market adoption and are mostly in their seed or early stages.
Passenger EVs
Commercial EVs
EV Batteries: Li-ion
EV Batteries: Other
EV Fleet and Battery Management
EV Charging Infrastructure
The Disruptors
Most top disruptors are public
The EV economy has a high number of listed disruptors compared with other industries—13 of the 15 highest funded disruptors were listed as of March 2022. Most of them have done so through SPAC deals. Passenger EV startup Rivian is the highest funded disruptor in the industry, having raised USD 12 billion at its IPO—this made it the largest IPO in the US since 2014.
Meanwhile, lithium-ion battery startup Northvolt is the highest funded private disruptor (USD 6 billion). Other notable private disruptors are mostly next-gen battery startups like Sila Nanotechnologies, Factorial Energy, Enevate, and Solid Power, while the commercial EV-maker Einride and the EV sports car maker Rimac Automobili have also raised more than USD 150 million.
More listed players also means that funding is somewhat concentrated, with the top 15 accounting for more than 90% of the total funds raised (among the top 50 highest funded disruptors). The industry is also relatively mature, with an average disruptor having been in operation for over nine years.
Passenger EVs
Disruptors
NIO
Rivian
Lucid Motors
Fisker
Canoo
Sono Motors
Rimac Automobili
Lightyear
Commercial EVs
Disruptors
Rivian
Nikola Motor Company
Proterra
Lordstown Motors
Xos Trucks
Volta Trucks
Einride
Bollinger Motors
EV Batteries: Li-ion
Disruptors
Proterra
Romeo Power
Northvolt
Sila Nanotechnologies
Group14 Technologies
Nexeon
Enevate
StoreDot
Nyobolt
Amprius
Nanoramic Laboratories
Addionics
NanoGraf Corporation
Advano
InoBat
NOHMs Technologies
EV Batteries: Other
Disruptors
QuantumScape
SES
Solid Power
Factorial Energy
Nanotech Energy
24M Technologies
Ionic Materials
NAWATechnologies
Addionics
Gridtential Energy
EV Fleet and Battery Management
Disruptors
Twaice
Titan Advanced Energy Solutions
ION Energy
EV Charging Infrastructure
Disruptors
ChargePoint
Wallbox
Proterra
Blink
EVgo
Volta Charging
Xos Trucks
Freewire
EV Connect
SemaConnect
Nuvve
NIO
NIO is a Chinese EV manufacturer focusing on a battery-as-a-service model. The company has deployed a network of 700+ battery swapping stations in China. Instead of charging a built-in battery like in other EVs, discharged batteries of NIO vehicles can be swapped with charged ones at these stations. The removed battery will be then slow-charged at the station before being swapped for a discharged battery from another NIO vehicle.
This model enables NIO to separate the vehicle from the battery. The customers can subscribe to a 70kWh battery at CNY 980 (USD 155) per month. This saves around CNY 70,000 (USD 11,000) compared with purchasing the car along with the battery. This also allows NIO to offer EVs at a much more competitive price point. The company’s latest Sedan (ET5), which was to be released in September 2022, was expected to come to the market at a starting price of CNY 258,000 (~USD 40,000) with a leased battery before government subsidies. The post-subsidy price of an entry-level Tesla Model 3 is around CNY 255,652 (~USD 40,000) in China.
NIO offers a range of electric SUVs and Sedans. The company’s operations are primarily in China, where it has sold 100,000+ vehicles (as of April 2021). NIO started deploying vehicles in Norway in September 2021. The company planned to enter Germany, the Netherlands, Denmark, and Sweden in 2022, and reach 25 countries by 2025 including the US.
NIO reported revenue of USD 2.5 million (+109% YoY) and an operating loss of USD 0.7 million (-59% YoY) in 2020. It raised USD 1 billion in an NYSE-IPO in September 2018.
- Segment:
- Passenger EVs
- Total funding:
- USD 5.4 billion
- Competitors:
- Lucid Motors, Fisker, Canoo, Rivian Automotive
Disruptor Funding History
Passenger EVs:
NIO
Rivian
Lucid Motors
Fisker
Canoo
Sono Motors
Rimac Automobili
LightyearCommercial EVs:
Rivian
Nikola Motor Company
Proterra
Lordstown Motors
Xos Trucks
Volta Trucks
EinrideEV Batteries: Li-ion:
Proterra
Romeo Power
Northvolt
Sila Nanotechnologies
Group14 Technologies
Nexeon
Enevate
StoreDot
Nyobolt
Amprius
Nanoramic Laboratories
Addionics
NanoGraf Corporation
Advano
InoBat
NOHMs TechnologiesCompetitive Analysis
Incumbents
Incumbents dominate passenger EVs and lithium-ion battery segments
Almost all major automakers have some form of electrification plan, which explains the strong incumbent presence in the passenger EVs segment. Among the top automakers, Volkswagen and the Renault-Nissan-Mitsubishi Alliance lead in terms of electrification, while automakers like General Motors, Ford, Toyota, and BMW are gradually ramping up their EV models and capacity. Meanwhile, Tesla, as the global market leader in the segment, holds a unique position as a pure-play incumbent.
The lithium-ion battery segment is also dominated by incumbents. Most of them have gained a foothold in the market by leveraging their in-house capabilities as diversified electronics players and long-standing partnerships with automakers. While incumbents have a somewhat limited presence in next-generation EV batteries, several automakers, as well as lithium-ion battery supplier Samsung, are developing solid-state batteries.
Shell and bp are two key incumbents in the EV charging infrastructure segment, having acquired two leading fast-charging suppliers ubitricity and Pulse, respectively. EV charging stations are a part of the two O&G players’ net-zero emission plans. Both ABB and Siemens are also prominent in this space. Meanwhile, incumbent presence in the commercial EVs segment is also somewhat limited, with just Daimler and Volvo having made any significant progress. EV and battery management solutions is another segment with little to no incumbent presence.
In-house
Partnerships
Investments
M&A
Tesla is the largest BEV manufacturer in the world with global and US market shares of around 20% and 72%, respectively (2021). It sold 936,172 units globally across its Model S (full-size car), Model 3 (mid-size car), Model X (mid-size SUV), and Model Y (compact SUV) EVs in 2021. Tesla Model 3 is also the all-time best-selling EV globally as of February 2022. Tesla manufactures EVs at its factories in Fremont, California (up to 600,000 units per year), and Shanghai, China (around 400,000 units in 2021 with the potential for up to two million units). Tesla has also unveiled prototypes of a pickup truck (Tesla Cybertruck) and a Class 8 truck (Tesla Semi).
Panasonic supplies batteries for Tesla’s US-manufactured EVs. The two companies jointly operate Giga Nevada (Gigafactory 1), the largest battery manufacturing facility in the world, with a manufacturing capacity of around 500,000 battery packs per year. Tesla purchases batteries from LG Chem and CATL for its Chinese-manufactured EVs. The company intended to manufacture some of its batteries in-house, though specific plans were yet to be disclosed as of March 2022.
Tesla also operates the largest global DC fast-charging network. There were 30,000+ Tesla Superchargers deployed globally as of March 2022. Tesla had a market share of 22% among the North American charging station operators in 2020 (in terms of the total charging stations deployed). Tesla EVs can be recharged up to 200 miles in 15 minutes using a Supercharger. Tesla engages in charging fee revenue.
Tesla was founded in 2003, while Elon Musk became the largest shareholder of the company and its chairman in 2004. Tesla’s first EV model, the Roadster sports car, was launched in 2009 (discontinued in 2012). The company went public via a Nasdaq IPO, raising USD 226 million in 2010. It then purchased the Fremont factory from Toyota to start production of the Model S. Tesla reported revenue of USD 53.8 billion (+71% YoY) and an operating profit of USD 6.5 billion (+ 227% YoY) in 2021. EV sales accounted for around 88% of Tesla’s total revenue.
