With an expected growth of market shares, a rapidly increasing amount of competitors, and both large public interest and national incentives, the electric vehicle market (or EV market) is developing at an astonishing speed. Here's what you should consider before starting to realize your automotive vision.
Few other market segments are expected to experience this level of growth. It gives the impression that electric vehicles will not just stay relevant but continue to increase in size and variety and dominate the vehicle market in the years to come. What does this mean for realizing your automotive vision?
Of course, this development has already caught the interest of numerous players having their own automotive vision – start-ups and established companies alike – who now seek to participate in obtaining their own share within the EV market.
However, just because the EV market has only recently emerged, this doesn‘t mean that success is guaranteed when you are thinking about realizing your automotive vision in this field. Before considering to join the market, it is important to get an understanding of the complexity of the EV market, vehicle development, and starting an EV production. The following five considerations will give new players an overview what is important to realize your new automotive vision:
Consideration 1 for Your Automotive Vision:
The EV Market is Extremely Contested
Rising awareness about resource depletion and climate change, changing legal requirements as well as scientific developments towards greater efficiency, profitability, and affordability are expected to hasten the rapid increase in EV market shares.
By 2030, it's estimated that EVs will possess a global market share of 35% – by 2040, they will probably overtake combustion engines as the dominant form of transportation, especially in Europe and China. (1)
Consideration 2: Without a Clear Automotive Vision, Success in the Market is Impossible
Simply having an automotive vision and building an electric vehicle is not enough to succeed in the EV market. It's important that the car has a clear purpose – not only being another vehicle, but a distinct product within its own category. This, of course, is also reflected in the automotive product vision unless one clearly knows what the vehicle should represent, why it stands out, and for what reason any potential customer or partner should be interested in both the vehicle and the brand itself.
Depending on the automotive vision, a vehicle can have multiple Unique Selling Points (USPs) like:
- a powerful battery allowing it to travel longer distances
- or whether it covers a specific customer demand, such as being an E-SUV
- or having last-mile transport solutions.
The playing field is rather wide, so one can (and should) carefully choose the features and benefits the vehicle has.
Another often-overlooked aspect of realizing an automotive vision is, of course, the environment one intends to sell in. Does the environment possess the required infrastructure for the vehicle? Is the vision technologically feasible? Is there even a demand on the market for the USP in the first place?
It's fundamental to analyze the potential market thoroughly before fixating on the automotive product vision – the more exhaustive the market studies are, the more likely one will find a suitable segment in which the idea may succeed. So keep in mind that conducting market studies is a vital step for every contestant to make.
Consideration 3: Partners Will Not Support an Automotive Vision Without the Facts to Back it
Another reason for conducting a large-scale market study before entering the market is credibility. Many new entrant do not yet have the environment necessary for conceptualizing, developing, manufacturing, and selling a vehicle.
And unless they intend to go the expensive and time-consuming route of providing everything by themselves, they need investors and partners in development/production to support their endeavor to realize their automotive vision.
However, no investor or partner will risk pouring their resources, time, credibility, and finances into a project that is not fully thought through and solely relies on personal conviction. New entrants will need to prove that the market actually demands their product and that it has enough potential to compete with established players. Moreover, they will need to prove this via verifiable studies, conductive research, and expertise.
In addition, they will also need to provide proof that they can organize the necessary environment for vehicle development. Potential partners, investors, and supply networks for their automotive vision as well as an estimation of time and resource demands should also be considered when pitching an automotive vision to potential partners.
Consideration 4: Regardless of Your Background and Automotive Vision, You are a New Player in the EV-Market
Whether the company stems from 100 years of experience in a different market or has just been founded yesterday, new entrants in the EV market will always start from scratch realizing their automotive vision.
When pitching the ideas to future partners, investors, and/or suppliers, the new entrant will also present the brand as an emerging player in a sector that has only properly established itself about 5-10 years ago. As such, they will also need to prove their worth as an EV manufacturer whenever they present their automotive vision.
If the new entrant is completely new to the business world altogether, one has to keep in mind that both a financial cushion and time are essential in order to even reach the starting line. Setting up a team and doing market studies can be fairly expensive upfront.
This is arguably the highest hurdle for every new entrant to overcome, but with competent planning, commitment, and a certain degree of boldness and risk-taking, one will be well prepared to enter the market and to realize their automotive vision.
Consideration 5 When Realizing Your Automotive Vision:
Use the Potential – It's Now or Never!
E-mobility is here to stay, and with many players already positioning themselves as competitors within the market, the window of opportunity grows smaller by the day. And while some unresolved questions regarding EVs still remain – notably the high resource and finance demands of manufacturing batteries or comparatively long development times – these factors are not the only ones to consider when considering the right time to enter the market. Because the right time is now!
E-mobility will only be integrated further into more and more segments of the vehicle market, and in 20-30 years at most they will likely replace combustion engines as the dominant type of vehicle globally (2). Right now, a new entrant will enter a market that is still in the process of consolidating itself, and there's still ample opportunity to get established as a recognized name in the EV business.
What's The Next Step When Realizing Your Automotive Vision?
Even with all the preparations complete and with all the pieces in place, there's no guarantee that automotive visions will actually succeed. Just like in every market, the possibility of failure should be a constant factor in planning.
However, the rapidly changing and ever menacing EV market shouldn't discourage new entrants - because behind it lies the potential of their automotive vision shaping the roads of the future. So for players who are determined and brave enough to enter the market, now is the time to act!
(1) Please refer to Article 2: „The Electric vehicle market – and why you should enter it now!“ for current statistics and data about EV market developments
(2) Please refer to Article 2: „The Electric vehicle market – and why you should enter it now!“ for current statistics and data about EV market developments