Vehicle Electrification: The past and the future of the automotive industry

The development of all-new electric cars has become a priority for nearly every major automotive manufacturer as they look towards the future. Most automakers are preparing to bring at least one all-electric model to market within the next five years, with entire product lines of new electric vehicles following within the decade. The trend is clear: the electric vehicle is the future. Yet, the electric car also has a long past.

Electric cars have been around since the 1800s, just as long as internal combustion-engine vehicles. At least in the U.S., the first successful electric car was developed in 1890 by a chemist in Des Moines Iowa.  Electric vehicles were popular back then for the same reason they are growing in popularity today. They lack the noise, vibrations, and emissions produced by internal combustion vehicles. In fact, by 1900, 33,842 (or 38%) of all registered automobiles in the U.S. were powered by electricity. Looking at today’s numbers, global sales of electric vehicles (EVs) in 2020 increased by 39% year-on-year to 3.1 million units. Analysts forecast that the number of EVs sold will rise to 30 million in 2028, and EVs will represent nearly half of all passenger cars sold globally by 2030.

There are several driving factors behind these predictions for rapid growth. Starting from a holistic perspective, the world population continues to grow, modernize, and urbanize. This means a greater number of the world’s people are moving to cities and bringing or buying new cars, leading to increased traffic congestion and air pollution in urban areas. Sustainability and emissions are thus important not only for the automotive industry, but for society in general. Upcoming regulations and other governmental incentives, such as the banning of cars in certain areas of a city or average emissions targets, reflect growing concern around the impact of automobiles on people and the environment. Consumer behavior is also shifting, with car buyers placing a higher priority on fuel economy, emissions, and other environmental factors of vehicles.

As these factors come together, automakers are beginning to face a new reality, from a business perspective. In the past few years, capital and consumer markets have begun rewarding new mobility solutions, which includes vehicle electrification, connectivity, and autonomy. Sustainability is now a critical thrust for the automotive industry and legacy automakers, tech companies, and startup electric vehicle manufacturers are all working to capture a share of this new subset of the automotive market. As the competition for EV market-share ratchets up, companies are encountering challenges unique to the design and production of electric vehicles.

Over more than 100 years, the automotive industry has been driving advances in the development and engineering of internal combustion engines, their packaging within the body of the vehicle, manufacturing and so on. When it comes to electric powertrains, automakers don’t have the same level of organizational knowledge or expertise. Coupled with the growing importance of software and electronics to modern vehicles, these companies are finding that they must reinvent the way they design and build products. These companies have discovered that connecting internal disciplines on a unified collaborative platform is helping them to pull ahead of the competition, drive down costs, and design smarter, safer, more sustainable, and more connected vehicles.

In a new episode of the Future Car podcast, I talk with Nand Kochhar, VP of Automotive and Transportation Industries at Siemens Digital Industries Software. We discuss the current push for electrification, the hurdles, and the innovations being developed as the automotive industry pushes towards the future. You can find the episode here: https://blogs.sw.siemens.com/podcasts/the-future-car/vehicle-electrification-the-state-of-the-ev-industry/