Global EV market growth has slowed down after making incredible strides in the past few years. Despite the initial excitement and investment surrounding the development of electric vehicles, several factors are currently hindering their continued growth. So, what’s putting the brake on EV development?
The global EV market has been gaining momentum in recent years, but it seems to have hit a rough patch in terms of growth. Even in major markets like the United States and China, the growth rate of EV sales has decreased. For instance, in the first half of 2023, U.S. EV sales amounted to 557,330 units, a 50 percent increase from the previous year's period. However, the growth rate was still lower than the 71 percent increase in the first half of 2022. Similarly, China saw a 32% year-on-year increase in EV sales in the first half of 2023, three times lower than the 109% YoY increase in 2022 .
This trend is not limited to major markets. In Korea, an emerging market for EVs, 91,825 electric vehicles were sold from January to July 2023, an 11.2 percent increase compared to the same period in 2022. However, this growth rate is much lower than the 75.6 percent year-on-year increase in EV sales in the first half of 2022. In July 2023, 12,848 EVs were sold in Korea, representing a M-o-M drop of 13.7 percent and a year-on-year decrease of 12.8 percent .
The faltering demand for electric vehicles has caused automakers to rethink their investment in vehicle electrification. Ford has announced it is postponing $12 billion in planned electric vehicle production , GM has abandoned a goal to build 400,000 EVs through mid-2024 , and Volkswagen Group has canceled plans for a new $2 billion EV factory in Germany .
One of the primary reasons for the major setback is that the development and technologies of EVs still fall behind traditional Internal Combustion Engine (ICE) vehicles. Due to high thermal batteries, short range, and limited charging facilities, EVs have faced safety concerns impacting consumer demand. Despite enormous investment in R&D by OEMs and government incentives, the EV industry is still struggling to keep up.
What’s Putting the Brake on EV?
The EV boom pressures OEMs to become more competitive and innovative. To stay ahead of the curve, they need to focus on providing transformative solutions that address the current woes of EV models. But what are the roadblocks stopping OEMs from delivering the EVs of the future?
Rapid Technological Advancements & Compliance
EVs are constantly evolving, with new technological advancements emerging on a regular basis. As a result, EV manufacturers must stay up-to-date with these advancements and ensure that their vehicles comply with both international and domestic standards. Such standards may include safety regulations, emissions requirements, and other technical specifications that govern the design, manufacture, and operation of EVs. Adhering to these standards requires a combination of continuous efforts, talents, and latest technology to keep up with the market while remaining flexible & scalable.
The EV industry faces a persistent talent shortage, primarily due to a lack of experienced professionals with EV-specific certifications and expertise. According to a recent report, LG Energy Solution, SK On, and Samsung SDI, which together command a third of the global EV battery market, are facing a skills shortage that could impede industry growth. The latest data from the Korea Battery Industry Association shows that South Korea lacks nearly 3,000 graduate-level positions in areas such as research and design . This is mainly due to the industry's relative youth in comparison to traditional automotive sectors. As a result, relatively few professionals have the necessary skills, certification, and experience to work in this field.
Cross-functional working model
One of the significant challenges EV carmakers face is establishing an efficient working model involving a team of experts with specialized knowledge and expertise. From hardware design to software development, every aspect of the project demands attention to detail and consistency to ensure the best results. Because of the unique requirements of electric vehicles, professionals with expertise in battery technology, power electronics, and electric powertrain systems must work together constantly to achieve success.
Finding the Right Companion
Amidst the slowdown in major EV markets, Vietnam has emerged as a new contender in the industry. Through the development of its own EV technology and the untapped potential for manufacturing and supply chain, the country is positioning itself as a critical player in the race toward a sustainable future. The Vietnamese government is also attracting international support for financing and developing the local EV ecosystem, contributing to increased talent and training in the industry, further strengthening Vietnam’s position in the global EV market.
Notably, FPT Automotive contributes to this growth in the country’s EV sector. With over 12 years of experience in the automotive industry, the company provides a wide range of services, including design consultation, software development, and rigorous testing and validation, to ensure OEMs can create revolutionary EVs that comply with international standards such as ISO26262 A-SIL A/B/C/D and A-SPICE Level 3. The tech-enabler company possesses highly adaptable approaches that can easily accommodate frequent changes in requirements. They provide a flexible and scalable working model that caters to the needs of EV makers, whether it be on-site, offshore, or dual shore. They also offer pliable business models, including onshore, offshore, hybrid, and even BOT (Build-Operate-Transfer), delivering solutions that exceed the expectations of EV companies.
What is more, FPT Automotive has a proven track record of success across the globe, exemplified by their work in Korea, where they completed a highly sophisticated AC-DC and DC-DC Converters project for a leading OEM Tier 1 company. The company has also developed state-of-the-art applications for an EV charging solutions provider and worked on OBC (On-board Charger) projects with one of the leading OEM Tier 1 companies in the global automotive industry. With FPT Automotive as the trusted companion, manufacturers can overcome the hurdles and challenges in the EV industry and create the future of EVs.