Coronavirus Pandemic Brings Unprecedented Changes in EV Market

Tesla currently controls the EV market. The California-based carmaker plans to manufacture several utility trucks in spring 2021. Teslas unveiled its intention to create a massive “Gigafactory” to start production in Austin, Texas. The move is a plan to take advantage of reduced corporate tax rates and policies. The company currently has   60% of the US EV market share and owns 20% of the market in China.

Wall Street faces immense competition from the Detroit-based car manufacturers plan to expand its business stake in the global EV market. Plans show that the company has plans to extend its product reach from 2 million units sold in 2019 to 10 million come 2025. However, the project affects the major car manufacturers, including brands like Nissan, Toyota, Mitsubishi, Mercedes, BMW, and Hyundai.

Interestingly the automobile industry faces an increase in demand for cars. Reports show that global car brands are increasing their manufacturing to meet this demand. The speculation stands that the cease in lockdown has resulted in a rise in demand for commodities that include cars. The coronavirus pandemic caused an extensive shutdown of goods and services, forcing a flatlining in production over seven months. 

The pandemics effect led to a total loss of 22% of sales in 2020 across the automotive industry to reach an industry record of $70.3 million in losses. The effect is more evident in the US as its market faced a 26% drop in revenue across the board. As the year closes, the US automotive sales are at 12.5million units, a new record low for the industry comparable to the great recession in 2010 that led to GM and Chrysler declaring insolvency. 

Things are looking up for the industry as a new demand for cars rises. However, the recent recession is opening up a new method of capturing the most out of the market. Various companies are teaming up to consolidate markets and turn a profit from it. The new surge in partnership sees companies like GM and Honda. The two automakers will merge their design teams to help streamline manufacturing. Likewise, Fiat is also joining the merging flow as it recently showed interests to merge with French carmaker PSA. The company hopes to reclaim its pre-corona period market share. However, now its focus is to establish a working business relationship with PSA. The world auto sales has dropped during the COVID-19 pandemic but the electric car sales market has remain resilient in many parts of the world.