2023: Year of the EV Battery

Charging/range anxiety: This is still a major pain point for consumer adoption. In 2023, charging speed and range will become topics that no longer relate only to drivers’ concerns, but also shift the way OEMs invest. We will see more investments in charging networks (longer range and faster charging mean greater numbers of BEVs served by a given charging network density) and penetration of particular market segments. These segments include drivers without a charging station at home, residents of small apartment buildings in cities, and drivers in rural areas. Public/private partnerships will need to drive the cost of electricity down and develop bi-directional power management (car to grid and grid to car) to increase buffering of renewable energy sources.

Supply Chain: Supply chain issues still plagued the automotive industry in 2022. Localized supply chain solutions will emerge to minimize disruptions of global supply chains. Over the next year, we can expect to see many South Korean, Japanese and European suppliers increase their investments in the U.S. to take advantage of the IRA incentives.

Investing in Tech: Recently, automakers have been overhauling leadership to bring in more tech talent. We will continue to see this trend in 2023; however, OEMs not only will fight hard for tech talent but also retrain existing workforces to rethink the automobile through a tech-centric lens. Other big areas of investment over the next year will include securing cell supply in each region, securing upstream materials with less dependency on China and a smaller carbon footprint, and securing intellectual property to support the technology roadmap to the end of the decade and after.

Cost: Right now, consumers are considering purchasing a BEV amid high gas prices but are anxious about the rising cost of the vehicle type and the lack of charging infrastructure. And while battery prices are said to be rising, these costs will come down as OEMs evolve their supply chains. Bottom line, BEVs still are too expensive for mass adoption. However, over the next year, we will see average BEV prices come down as affordability and borrowing costs will become bigger issues. The less-expensive models will gain market share.