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You may not be planning to buy an electric vehicle, but automakers are betting billions on you

  • Automakers have been busy lately, announcing new electric vehicle and battery production facilities across the globe, from the United States to Europe to the Middle East.
  • On Friday, Hyundai announced new electric vehicle factories in Georgia, while Lucid Motors gave more details about its next plant in Saudi Arabia.
  • As money is allocated to produce new EVs in the coming years, EV prices are climbing today, with Rivian and Tesla raising the price of some of their EVs by more than 20%.

    Over the past decade, the automotive industry has been slowly but surely preparing for an all-electric future. As the scope of electric vehicle production continues to grow, we can see that it’s an expensive journey we’re about to take. From the six gigafactories across Europe that Volkswagen announced last year to Ford’s plans to build two massive battery factories in Tennessee and Kentucky with partner SK Innovation for a total investment of more than $11 billion, the plans are real. Electric vehicles are definitely coming, so get ready.

    A number of recent EV production announcements show that the EV transition is kicking into high gear. Volkswagen has taken the next steps in its European electric vehicle production plan with a pair of announcements. First, the company will spend one billion euros (just under $1.1 billion) to build the all-electric ID.4 at its plant in Emden, Germany. Second, VW and Seat will “mobilize” 10 billion euros ($10.6 billion) to upgrade production facilities across Spain. The money represents “the biggest industrial investment in the history of Spain”, VW said in its announcement.

    The transition to electric vehicles is happening all over the world. To coincide with President Biden’s trip to South Korea last week, Hyundai announced that it will build its first electric vehicle and battery manufacturing plant in the United States in Bryan County, Georgia. The new facilities will require Hyundai to spend around $5.5 billion and, although more details will be released later, Hyundai has said it will be able to build 300,000 electric vehicles at the new plant when it is fully operational. . Hyundai will inaugurate the plant in early 2023, with commercial production beginning in the first half of 2025.

    The same change is happening in some oil-friendly countries. Lucid Motors this week announced more details about its upcoming electric vehicle production plant in Saudi Arabia, for example. The new plant, located in the King Abdullah Economic City, is expected to start producing electric vehicles by the middle of this decade. Lucid said the new plant would be able to produce 150,000 vehicles a year, and the Saudi government said it would provide funding and incentives to Lucid worth up to $3.4 billion, in total , over the next 15 years. Lucid’s main manufacturing site, where production of the Air EV sedan began last September, is in Arizona.

    Which brings us back to potential EV buyers and how these massive investments could affect the new cars you, and most of us, will buy in the years to come. On top of investing in all those new factories, there are the costs associated with sourcing raw materials and managing a still out of whack supply chain (as well as inflation). And we’re already seeing automakers raise prices for some electric vehicles today. CNBC reported this week that some automakers, including Rivian and Tesla, are raising prices for their electric vehicles by about 20% to deal with rising costs in recent months. Lucid has increased its prices by just over 10%. CNBC noted that Cadillac raised the price of its all-electric Lyriq crossover about 5% before it went on sale this summer. The question will be when will electric vehicles be produced in high enough quantities that they start to become more affordable? We should find out in the next few years.

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