The money is with electric cars: automakers have pledged $526 billion in collective investment for electric vehicles through 2026.
And the momentum is with electric cars: the US just passed the 5% milestone, where five percent of all domestic auto sales are electric vehicles. This is generally considered a tipping point, where EVs will start to become widely adopted.
That being said, internal combustion engines (ICE) are going to be with us for a while. That may be of comfort for those not keen on electric drivetrains, but there is a catch: just because OEMs will pump out millions of ICE-powered vehicles, that doesn’t mean they’ll be the latest and greatest.
With the research-and-development dollars going toward electric, there will be very little money going toward the ICE side. Engines and transmissions will get long in the tooth with very little innovation, other than what is needed to make them more efficient or to meet stricter emission standards. Why spend money on development when ICE vehicles are slated to fade away?
The same will go on the outside – why spend upwards of $1 billion dollars to launch a new model? It makes more sense to spend a tenth of that amount and spruce up the outside of a current model. The sleek and sexy vehicles will be the newly-developed electric ones.
This will likely further fuel the shift toward electric, as all of the hot new products arrive with electric propulsion. When choosing between sexy and stale, sexy pretty much always triumphs.