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The world is racing to speed up electric vehicle manufacturing and adoption

As the world reckons with a summer of unprecedented drought and flooding, heatwaves and fires, and an expected uptick in hurricane activity caused by climate change, the move to electrify mobility is becoming one of the bright spots in the worldwide effort to reduce fossil fuel consumption and greenhouse gas emissions.

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Tesla is opening up its charging stations to all electric vehicles. Mercedes Benz has pledged to make its entire fleet of cars manufactured after 2025 electric-only. The electric truck maker Rivian has raised $2.5 billion and is beginning to bring its own electric vehicle chargers to state parks. And Lucid Motors is making its debut today on the Nasdaq stock market.

The world’s automakers and their investors are accelerating the pace of electric vehicle manufacturing and the buildout of the infrastructure necessary to combat the anxiety some would-be buyers still feel about their ability to charge up.

In the U.S., transportation accounts for nearly 30% of greenhouse gas emissions and passenger cars and other light vehicles make up about 60% of that figure. That’s why there’s been so much emphasis on moving drivers over to electric (and hybrid electric) vehicles.

2021 could be seen as the watershed moment for electric vehicles. Ford announced an electric F-150 (the most popular vehicle sold in the US), Subaru, Kia, and Hyundai all announced new electric vehicles, and upstart brands like Fisker, Canoo, Lucid and others began to expand their product lines.

In this context, the Mercedes Benz announcement of the total overhaul of its cars by 2025 is just another datapoint.

“The EV shift is picking up speed — especially in the luxury segment, where Mercedes-Benz belongs. The tipping point is getting closer and we will be ready as markets switch to electric-only by the end of this decade,” said Ola Källenius, CEO of Daimler AG and Mercedes-Benz AG. “This step marks a profound reallocation of capital. By managing this faster transformation while safeguarding our profitability targets, we will ensure the enduring success of Mercedes-Benz.”

While automakers are building the next generation of electric vehicles, automakers, energy companies, utilities, and charging networks are vying for new customers.

Tesla founder and chief executive Elon Musk wrote on Twitter that his company would open up its network of 25,000 electric vehicle chargers to owners of all EVs (and not just Teslas) at some point soon. The fast-charging Tesla stations are among the most notable brands in the space, but companies like EVgo and Chargepoint are making waves in the US and Europe.

Chargepoint recently acquired a European company to expand its footprint in international markets and EVgo recently had a public offering to access low-cost capital so it can build out its network of charging stations.

These initiatives set the stage for a whole range of new tech companies to enable better charging infrastructure — from software management for charging and fleets, to services to maintain charging stations to new kinds of battery swapping technologies to replace the need for charging up altogether.

It also means that there’s opportunities for newer, better, batteries that could debut in cars over the next few years. These batteries have longer ranges and would require less time to charge up.

Businesses like QuantumScape, SolidPower and SES are all massively funded companies developing these new battery technologies (QuantumScape had its own public debut on the stock market in November 2020) that promise to bring these benefits to electric vehicles in the next five years.

Ample, another company looking to alleviate electric vehicle range fears, has taken a different approach by pitching a business that would swap out depleted batteries for fresh ones. The process can take less time than the 20 to 30 minutes that even fast chargers require to fill up a battery, according to the company.

The transition to electric vehicles isn’t just good for the environment, it’s also good for the wallet.

A recent study by the Los Angeles-based electric vehicle fleet management company Amply indicated that fueling light duty electric vehicles with electricity in 22 of the largest cities in the US is 44% less expensive than using gasoline. And if companies operating fleets of at least 15 vehicles switch to electric options, they’d reduce greenhouse gas emissions by 2200 tons.

And naysayers worried about the overall environmental benefits of going electric can rest easy.

Although a study from the Massachusetts Institute of Technology Energy Initiative found that battery and fuel production for an EV generates higher emissions than making a combustion engine vehicle, those environmental costs get offset by the overall efficiency of the vehicle.

So the total emissions per mile for battery-powered cars are lower than comparable cars with combustion engines, as CNBC reported.

“If we are going to take a look at the current situation, in some countries, electric vehicles are better even with the current grid,” Sergey Paltsev, a senior research scientist at the MIT Energy Initiative and one of the study’s authors, told CNBC.

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