What are the weaknesses of EV car
The pros and cons of electric cars
Sure, Elon Musk might make electric vehicles sound as exciting and incredible as the Millennium Falcon, but really, they're just cars, with a new, or at least less common, form of motive force.
In basic terms, an electric vehicle (EV) is a car that forgoes a common petrol-powered internal-combustion engine (ICE) for an electric motor powered by a rechargeable battery pack.
EVs are growing in popularity - just like Tesla shares - chiefly due to the fact they are more environmentally friendly. EVs produce no exhaust emissions, indeed they don't even have exhaust pipes, so they are obviously beneficial in terms of CO2.
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It's important to keep in mind, of course, that if you charge an EV using electricity from a coal-fired power plant, your contributions to CO2 overall still exist, but they are lessened.
Globally, over 10million electric cars (EVs and PHEVs) were sold in 2022- an increase of 55 per cent relative to2021- with China representing roughly half ofglobal EV sales in 2022.
A lack of a strong national electrification policy and significant global stock issuesmeans were a little slower on the uptake here in Australia - EV sales accounted for roughly four per cent of the overall market in 2022- but interest in electric-powered cars and their benefits is steadily growing, looking to double in 2023.
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Download for freeAdvantages and disadvantages of electric cars
Pros
1) Environmental impact
The prime reason why electric cars are seen as the future, and likely the first bit of information youll hear when EVs are brought up, is the fact that they have a far less damaging environmental impact than petrol-powered cars. No internal combustion means zero exhaust emissions - a very important factor when you consider that a typical passenger vehicle emits about 4.6 metric tons of carbon dioxide per year.
This, of course, doesnt mean that EVs have zero net emissions: the manufacturing of EVs still has a negative environmental impact, although some car companies are looking at ways to make EV production completely carbon neutral. Grid electricity used to charge EVs also involves fossil fuels, although there are ways to use clean, renewable energy, like solar and wind power to charge your EV, which really does make an impact to your personal carbon footprint.
2) Savings
Since EVs dont run on petrol, youll be completely cutting out your fuel costs when you buy an electric car. Petrol and diesel-powered cars are rated by how many litres of fuel they use per 100km (litres/100km), whereas EVs are rated on how many kilowatt hours (kWh) are used per 100km. If you use the amount 0.25 cents per kWh as an Australian average, youre looking at a total cost of $25 for 100km of travel. With petrol being on average around $2.00per litre here, the savings you can make by going electric are substantial. Charge your car using solar power only, of course, from your own roof-top panels, and you can run your vehicle entirely for free. On sunlight. Amazing.
3) Maintenance
EVs have far fewer moving parts when compared to a petrol-fuelled ICE car, meaning they require far less in the way of maintenance. The battery, motor, and associated electronics require little to no regular upkeep, and there are far fewer fluids, like engine oil, to be worried about. EVs also use an energy-generating technology called regenerative braking, which places less wear on the brakes, meaning theyll last a whole lot longer. The upshot? A huge reduction in long-term maintenance costs.
Cons
1) Cost
Due to the lower demand for EVs and relative lack of them on Australian roads, electric cars are still expensive when compared to similar ICE models. Car companies typically like to try and recoup some of the billions they spend on research and development, but the major reason for the high price tag is that because there are lower volumes of core EV parts like the battery and engine being made, the cost to manufacture them is much higher. In fact, the battery pack is the most expensive part of an EV - as the cost of battery manufacturing falls, EV prices will drop as well, to the point where they are directly competitive with petrol vehicles.
2) Range
One of the perceived problems with EVs is their lack of range, ie how far they can travel in kilometres on a fully charged battery. A Tesla Model S has a claimed range of approximately 652km from a single charge, and considering the average passenger car travels 36.4 km kilometres a day, that amount is more than enough to keep most people covered. Still, its not even half of what the diesel-powered Toyota LandCruiser Prado can achieve: its 150-litre fuel tank offers a whopping 1898.7km of travel. Although going that far on a single tank is hardly ever necessary, it does highlight that EVs still have a way to go in terms of range, and its one of the main reasons why electric cars are a bad option, according to some folk.
3) Lack of incentives
Other countries have gone above and beyond to introduce incentives to make buying EVs an attractive option. The UK offers free rego for all EVs that cost less than 40,000 ($73,600), and 35 per cent of that cost will be covered up to 3500 ($6440). The generous tax breaks for zero-emission cars in Norway have also led to that country being the first in the world to see EVs outsell ICE vehicles (2021 new car sales were made up of 65 per cent EVs and 22 per cent PHEVs). Here in Australia? So far, there has been a chaotic and largely state-based approach to incentives which are a moving target and seem to change on a near quarterly basis as Australia's jurisdictions struggle to keep up with electric car demand. To check out the current state of EV incentives in Australia, see our separate story here.
Incredibly, the Victorian government has implemented a 2.6c per km road tax on zero-emission vehicles like EVs, with NSW set to introduce a similar tax in 2027, although these state-based taxes could be headed the way of the dodo if this recenthigh court ruling is anything to go by.
Conclusion
Those who have to keep a closer eye on their bank balance may want to wait a few years before the price of EVs inevitably comes down. For those that can afford one, however, an EV is the smart choice, thanks to zero exhaust emissions and far lower maintenance and running costs, saving you - and the planet - unnecessary pain in the long run.
Best electric cars 2024 the EVs to buy and those to avoid
Grand tourers need to be sleek, fast and capable of covering huge distances. And for that alone, the Audi E-tron GT lives up to its name. Officially, it can accelerate from 0-62mph in 4.1sec, but at the hands of our testers, its gone even faster. It can cover up to 305 miles on a charge and can accept charging speeds of up to 270kW if you can find a charger with enough oomph, only the Porsche Taycan and Maserati GranTurismo Folgore can match it.
The E-tron GT is a little softer than the more agile Taycan, but it still drives superbly, and is far more entertaining than a Tesla Model S. Its also nicer inside, and unlike both the Tesla and Taycan, there are physical buttons for regularly-used features. Theres no doubting the tech, which is easy to use and the screens are clear and responsive.
Its not quite perfect, though. With a starting price of more than 80,000, its quite pricey even if resale values are very good. And theres a bit of whine from the motor but if you can overlook that, it really is a fine electric car.
"Most of the E-tron GT's dashboard controls take the form of physical buttons, making quick adjustments really easy on the move," Neil Winn, Deputy Reviews Editor
Tesla SWOT Analysis (2021): 33 Biggest Strengths and Weaknesses
Tesla made headlines as the first major car manufacturer to produce all-electric vehicles, and now for being the largest company ever to be added to the S&P 500. With renewable energy and sustainable living increasingly in focus, Tesla seems to have timed its vision perfectly. But is its current business model poised for long-term growth, and is the market ready for its products?
A SWOT analysis looking at a companys strengths, weaknesses, opportunities, and threats can help a prospective car buyer decide if Tesla is worth the hype and price tag.
Strengths
1. It is a powerful brand in the luxury electric vehicle market. The power of a companys brand is everything. If the perfect storm of early adoption, innovation, customer demand, and continued prominence hits, a company can virtually become synonymous with the market it is trying to corner. Think about Kleenex, or Band-Aid, or even Google: they are so closely linked to their respective products that the names are practically interchangeable.
2. It has the greatest market share of the luxury electric vehicle market. Tesla virtually owns the luxury electric vehicle market. While other companies like Nissan, Toyota, and Honda have become household names for budget electric cars, Tesla is the only manufacturer to aim for nothing less than high-end electric vehicles. It has cornered the market with no competition, giving it an instant competitive edge. This creates prestige for those who purchase a Tesla.
Tesla delivered 180,570 electric vehicles in the fourth quarter of 2020, and produced 179,757 vehicles. This is up from its previous best quarter where it delivered139,300 in the third quarter of 2020. (CNBC)
3. It is a great place to work for employees and employees want to stay there. A company can live or die by the people it hires. Every employee is the face of its company, and Tesla is known not just for hiring the right people, but treating them right once they become part of the family.
Tesla is a company that thrives on innovation, and it encourages this forward-thinking spirit in its employees. It has been recognized as one of the best companies to work for, with a strong employee retention rate.
4. It has the largest market share of U.S. electric vehicle market. One advantage of being the only major player in the market is that sales are strong. Tesla sells more electric vehicles than any other manufacturer. Even much larger manufacturers like Chevrolet simply cannot compete with Tesla when it comes to sales figures for electric vehicles.
It also has higher revenue numbers, meaning it is not just selling a greater quantity of vehicles, but a higher total value is sold as well. Maintaining this market share over time will be key, but for now, Tesla is the one to beat.
5. It self-produces most of its components for its vehicles. One way to keep costs down and maintain total quality control of your vehicle components is to make them yourself. This is exactly what Tesla does with the majority of its parts. This removes layers of dependence that can cripple production, ensures that all parts are made specifically for its vehicles alone, and puts Tesla in the drivers seat on quality control.
6. It sells its cars directly to customers without needing a middleman. Another way to keep costs down is through a direct distribution model. Through this model, a car company does not have to pay dealer fees because it is selling its product directly to the public. Tesla adopted this kind of model, allowing customers to purchase through company-owned dealerships.
People can also buy and customize their vehicles online, which creates a more personalized buying experience compared to walking through a big lot of largely identical vehicles.
7. It has the best range of any electric car. Teslas cars lead the market in maximum driving range. Its attention to quality and exclusive focus on making the best and most effective electric cars has yielded outstanding results in available mileage on a single charge.
This solves one of the biggest problems with electric cars: miles per charge. Traditional gasoline-powered vehicles have a reliable range on a full tank of gas, but electric cars are more unpredictable. Using additional functions such as headlights, air conditioning, and music drains the battery on an electric car, thereby decreasing the maximum distance it can travel before requiring a recharge.
8. It is part of the S&P 500 Index. Tesla was added to the S&P 500 Index in December 2020. It had the largest market capitalization of any company ever added to the index. As a point of comparison, its market cap was roughly $100 billion larger than Warren Buffetts Berkshire Hathaway at the time.
Because it is part of the index, index funds are forced to buy Tesla stock simply because it is included in the index. These purchases are estimated at 17% of Teslas tradable shares, according to Morgan Stanley. This guaranteed investor base is a positive for Tesla. Another benefit to being part of the index is that the volatility of a companys stock price typically decreases once it is included in the index.
9. It has great service technicians. Tesla knows how to hire and train its service technicians. The technicians typically receive high satisfaction ratings from customers.
Weaknesses
1. It doesnt manufacture enough of its components to keep up with customer demand. In-house manufacturing services can be a blessing and a curse. While a company can ensure quality by manufacturing all of its own components, it must ensure that it is capable of meeting consumer demands.Compared to larger, more established manufacturers, Tesla has far fewer production hubs, meaning that it is limited in how many vehicles it can produce. It needs to add additional sites to keep up with demand.
Tesla missed its goal for annual deliveries, delivering 499,550 vehicles in 2020 versus its publicized goal of 500,000 vehicles. (CNBC)
2. All of its batteries come from a single source, and it usually doesnt have enough of them. Tesla quickly became the worlds largest consumer of batteries, and they all come from a single source. For an electric carmaker, the battery is the most important part, and when that supply runs short, production is effectively halted. This bottleneck is to be expected given the nature of the company, but until it can adequately address this issue, Tesla will be bound by this limited supply.
3. Its customer service is subpar. Tesla may have strong innovators designing its products, but customer service remains a major sticking point with consumers. Likewise, customer satisfaction with the cars themselves is high, but not with the buying process. Much of the experience of a new vehicle is the buying process, and Tesla does not reliably provide a positive consumer experience.
4. Tesla is a one-man show. Say the name Tesla, and without fail, many people will immediately think of its celebrity billionaire founder, Elon Musk. Without Musk, it is not clear that Telsa would have direction or leadership. In a sense, Tesla = Musk.
5. Its leader is also running at least one other company. Musk is also known for his investment in SpaceX, now the sole provider of space travel to the United States. He has spent much of the past decade working on SpaceX. Telsa does not have 100% of Musks time and attention.
6. It is priced high and out of the price range of the average consumer. As a luxury carmaker, Tesla has positioned itself to a specific, and limited, class of consumers. Luxury vehicles are not typically attainable by large segments of consumers which can put the company at a disadvantage. The high price alone prevents many people from jumping on the electric vehicle bandwagon.
The high cost of a Tesla is tied to the high cost of researching, innovating, and producing its electric vehicles. Even with the cost-saving measures of in-house manufacturing, electric cars are still an expensive prospect until certain economics of scale are reached. Until then, Tesla will have to be satisfied with a smaller potential consumer base.
7. Tesla has a lot of debt to pay down, which limits its ability to take on more debt. As a startup and an early adopter of sustainable energy technology, Tesla has accumulated quite a bit of debt in order to go to market. With loans from corporate investors, grants from the federal government, and cash flow infusions from Elon Musk himself, the company requires enormous amounts of funding to do what it does.
8. It is not easy for Tesla to be profitable. Tesla has only become profitable this year. Sales have been creating a net loss for Tesla, despite its popularity. Numerous factors are at play, but the fact remains that profitability is difficult for Tesla at this point in the companys lifecycle.
Opportunities
1. It can take advantage of economies of scale with its upcoming gigafactory. Currently, Tesla has only one manufacturing plant to build all of its vehicles. This severely limits how many cars it can make. Tesla knows that it needs additional plants to produce more and then sell more.
It isinvesting in a gigafactory concept to help it meet the demand of a growing market and position the company to rival other mainstream car companies with their production scales.This can lead to increased market penetration rates, especially as electric car technology becomes more widely accepted by consumers.
Tesla aims to increase sales volume from about 500,000 in 2020 to 20 million per year in the next ten years. (CNBC)
2. It has billions of potential customers in the Asian market. Asian countries are a massive target for companies all over the world, including car companies. With billions of potential customers, they are flocking to these nations in the hopes of reaching new segments of car buyers. With its already booming reputation for excellence in electric cars, Tesla is uniquely positioned to reinforce its standing in Asian markets, which can add to its bottom line and give it a legitimate reason to expand its production capabilities.
3. It can tap into a broader customer market by producing less-expensive cars for the average consumer. Tesla is a luxury brand, but by reaching consumers at a lower price point, it can reach more of the car-buying market. Releasing a mid-priced vehicle expands the possibilities for tapping into those additional customers.
4. It can sell fleets to corporations, which will help them meet their environmental sustainability goals. An opportunity for downscale market penetration is in fleet sales to corporations. Convincing companies to convert their mass-purchased fleet vehicles to electric cars would be a coup for Tesla. This helps companies with their corporate images, increases Teslas car sales, and shows the world that Tesla is deserving of trust by not just individual consumers, but corporate customers as well.
5. It can increase the number of cars available for sale by self-producing batteries. Tesla already produces many of its components itself, with one significant exception: its battery. Tesla has a huge opportunity to increase its battery supply (and thereby its supply of vehicles for sale) while likely decreasing costs if it can successfully bring battery production in-house. It would no longer be reliant on outside manufacturers and it also could bring its product to market faster and in greater quantities.
6. It could make electric pick-up trucks and reach that additional market segment. Tesla has focused strictly on making cars, as opposed to other types of vehicles. Only recently has it ventured into sport-utility vehicle territory. A major avenue for growth could be tapping into the market for pickup trucks.
Most truck buyers seek out power and capacity in trucks. Simply put, an electric truck might not seem tough enough. While hardier jobs may still require gasoline-powered vehicles, producing a truck with increased hauling capacity could provide Tesla with another untapped market segment.
Tesla plans to produce a car that costs $25,000, its Cybertruck, Semi and a new version of its Roadster. (CNBC)
7. Once the charging infrastructure is built out enough, people will have more confidence in driving a Tesla. Do you really want to try to map the charging stations for your cross-country road trip? If people cannot charge their vehicles while traveling, an electric car is effectively useless. Right now, there arent enough charging stations across the country to make some people feel comfortable with buying an electric car.
Tesla understands this and has already constructed thousands of charging stations across the country. When charging stations are nearly as plentiful as gas stations, the choice of whether or not to buy an electric car will be less difficult.
8. Buying a Tesla means helping the earth, and many consumers like that. Tesla has spent much of its marketing and public relations efforts on its commitment to environmental sustainability. As a result, the earth friendliness of its cars is a big selling point with customers. As more and more nations have leaned into sustainable measures and methods, Tesla has become the poster child of how shaking up the status quo is possible.
9. Further governmental emissions reductions would help sell more Teslas. Closely linked to the general public perception of sustainability is buy-in from the government. In most cases, governments must mandate certain measures for environmental practices in order for them to have any real effect.
Tesla has the opportunity to become a vocal advocate for governments to further restrict automobile emissions. Such measures can only help Tesla in its quest to become a major player in the automotive market.
10. It is the leading force behind self-driving technology. As it pushes the envelope with electric power, Tesla is also one of the leading companies in self-driving technology. This additional innovation not only further improves its public perception of technological capabilities, as does SpaceX, but is an opportunity for a new market if it can safely master true autonomous driving.
Teslas currently have an autopilot function which enables the car to steer, accelerate and brake automatically in the lane that it is in, but you still cant fall asleep at the wheel and let the car drive itself.
Threats
1. It faces increasing competition from large car corporations. While Tesla has much of the electric car market share, other companies are starting to catch up. Whats more, those companies can offer less expensive models than Tesla in some cases. As emissions standards continue to shift and change, and as more companies adopt this approach to car manufacturing and enter this burgeoning market, Tesla will need to do more to stand out and justify its price tag.
IHS Markit estimates that electric vehicles will be 10.2% or 9.4 million out of almost 92.3 million vehicle sales in 2024. (CNBC)
2. It has notable legal liability for manufacturing its own components and faces lawsuits. Car companies inherently accept liability when something goes wrong with their products. Since Tesla produces so many of its components, it naturally increases its liability for failed components.
Failures in both quality and performance have led to several lawsuits against the company, which damage its reputation for reliability. Whether or not anything comes of a lawsuit, the fact that Tesla is being sued harms its reputation.
3. Consumers may or may not accept self-driving cars anytime soon. Despite improvements in the technology required for self-driving cars, the general public is not yet ready to commit to the idea of cars driving themselves. Potential customers have concerns over personal safety and the ethical decisions the cars are programmed to make when faced with a scenario involving multiple possible fatalities.
Furthermore, the potential for system glitches and failures makes this technology pretty close to a non-starter at the moment.
4. Tesla has produced components that have been defective. With every new innovation comes hiccups, and Tesla is no exception. Because there are so many proprietary products used in its cars, it has various issues with those components. Poor design, unreliable performance, and even improper implementation have caused several issues with the various parts used to make Teslas vehicles. More real-world testing and component improvement are required.
5. Elon Musk has an eccentric and highly visible public image. Elon Musks public image is also a cause for concern. As previously mentioned, Musk can either be an asset or a liability depending on his behavior. It has been said that his erratic behavior is measured in the number of tweets he sends per day, which averages from four to 15 per day.
As an example of the harm he can cause to the credibility of his company, in March he graciously promised that Tesla would manufacture ventilators and ship them to hospitals for their coronavirus patients. He did ship ventilators, but hospitals said the ventilators were the type to treat sleep apnea, not the sickest coronavirus patients.
For a business so closely associated with its leader, Teslas fate is tied to how the public perceives Musk. Those that like him like his products, and those that do not shop elsewhere. Fair or not, Musks reputation will ultimately have a strong influence on the success or failure of Tesla as a company.
6. Regulations that are unfavorable to Teslas cars could impair its strategies. Tesla has some issues to overcome in the regulatory space. One is the lack of regulation for self-driving vehicle operation. Since it is a new technology and not much is known about how it can be put into practice, extensive study is required before the regulations will catch up with the technology. When it does, hopefully, it is favorable to Tesla.
There are some regulations at the state level that prevent vehicle owners from selling directly to the public in certain states. Since Tesla does not sell its product to dealerships, it could be shut out of these markets entirely if these hurdles cannot be overcome.
Conclusion
Tesla has a lot going for it: a growing reputation for excellence, a household name for innovative technology, and the potential for massive growth. However, it needs to overcome the potential roadblocks of lack of production capacity, continued carrying of major corporate debts, and legitimate problems that tarnish not only its public image but also its ability to produce a reliable product.
Like many companies, only by taking full advantage of its strengths, capitalizing on its opportunities, avoiding its weaknesses, and addressing its threats can Tesla truly find sustainable success as a company.
