February 7, 2023

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An EV explosion awaits us in 2023, and it will be packed with technology • Eureka News Now

2022 was the year electric vehicles entered the mainstream. Not everyone has one, but buying an EV doesn’t make you a runaway anymore. Fueled by policy initiatives from governments and billions of dollars in investment from automakers, we can safely say that the EV industry has started to take shape.

Over the next year, this landscape will evolve beyond the foundations of 2022. Here are some of our best estimates of what to expect.

There will be a race to sell US-built electric vehicles in the first quarter

The anti-inflation law passed by the Biden administration in August is already having a huge impact on the electric vehicle industry as automakers work to shore up their supply chains and factories. But with certain aspects of the IRA’s EV tax credit rules now set to be delayed until March 2023, we expect EV sales to pick up in the first quarter of the year.

Under the bill, eligible EVs could qualify for a $7,500 tax credit if they meet the requirements of being built in North America and have sourced critical battery materials from the United States or Free Trade Agreement countries. Those rules were supposed to go into effect on January 1, 2023, but the Treasury Department has delayed guidance on the Critical Materials Rule until March. And that’s just as well. While automakers scramble to set up factories in the US in 2022, most critical materials still come from China, so it will take them time (probably years) to set up new supply chains.

The delay means a fair number of North American-built cars are now eligible for full refunds for at least the first three months of the year. The biggest winners are expected to be Tesla and General Motors, whose sales caps will be lifted under previous EV tax incentives in the new year. But others like Ford, Nissan, Rivian, and Volkswagen all have a line of North American-built EVs ready to take advantage.

Even more EV models and sales

EV sales in 2022 were pretty much dominated by what you’d expect: Tesla’s Model S, Y, and 3, Chevrolet’s Bolt, and Ford’s Mustang Mach-E. In the background, almost every automaker, be it a legacy OEM or a startup, has unveiled a range of impressive EVs for the 2023 market, from the Alfa Romeo Tonale to the Indi One. However, most of them were aimed at the luxury consumer. In the next year there will be more new models that are much cheaper.

Also, expect the sheer number of new electric vehicles on the market to increase as new factories come online. McKinsey predicts legacy automakers and EV startups will produce up to 400 new models by 2023.

Any new models that come out will rival Tesla, predicts Shahar Bin-Nun, CEO of Tactile Mobility, an AV sensor technology company. Bin-Nun says he expected Tesla to still dominate the US electric vehicle market in 2023, but that Ford, Hyundai and Kia will follow closely as they increase their lineups and production capacity.

We can also expect the used electric vehicle market to creep up in 2023, making it much easier for the wealthy to afford a zero-emission vehicle.

The software-defined vehicle will really take off

All automakers throughout 2022 have been talking about the “software-defined vehicle” as a concept inseparable from the electric vehicle. In 2023 we will really get a chance to see what that means.

General Motors, for example, will launch Ultifi early next year, its end-to-end vehicle software platform that promises OTA software updates, cloud connectivity, and vehicle-to-everything communications. Ultifi will be the place where drivers can buy apps, services and features – it’s an example of how automakers are increasingly trying to customize vehicles to individual needs.

This personalization is likely to lead to an increase in subscription-based in-car services, says Will White, co-founder of Mapbox, an online mapping provider.

“We will continue to see strong demand for convenient services like in-car payments, where consumers have a credit card on their app that pays for everything related to their car,” White said.

In the backend, the software-defined vehicle will also dance with the metaverse. In 2022, a number of automakers including Jaguar Land Rover, Nio, Polestar, Volvo and XPeng announced plans to build software-defined vehicles on Nvidia’s system-on-a-chip Drive Orin. Automakers will also come to rely on Nvidia’s recently updated Omniverse platform in 2023, which will revolutionize everything from vehicle development to the automotive product cycle. Using such technologies, automakers will increasingly create digital twins of both their vehicles and their production facilities to simulate everything from in-vehicle software upgrades to crash testing to factory efficiencies.

I think we need to get used to saying Level 2+ ADAS

Speaking of software, automakers will invest a lot more in 2023 in rolling out Level 2+ and Level 3 autonomous systems, which are basically really good advanced driver assistance systems. White says these systems will be a common expectation in high-trim models.

Tesla will, of course, continue to add new features to its Autopilot and so-called “Full Self-Driving” software. But other automakers will also come out with their own brands of impressive technologies that will take on more and more automated driving tasks.

Earlier this year, autonomous vehicle maker Argo AI closed after Ford and Volkswagen pulled back investments. Intellectual property was fairly split between the two automakers, both of which said they were determined to pursue near-term wins like L2+ and L3 systems. Rivian founder RJ Scaringe also said his company will focus on getting its own ADAS right.

Meanwhile, in China, XPeng is launching the G9 SUV with its XNGP software, which the company describes as a “full scenario” ADAS that promises to automate highway driving, city driving and parking tasks.

More investment in the right charging

Analysts at JD Power expect EV market share in the US to reach 12% next year, up from 7% today. If you narrow the scope to consumers who actually have access to electric vehicles, that market share actually looks more like 20%.

Regardless of the number, the fact remains that we will see millions more electric vehicles on the roads in the US next year. That means all the ancillary services needed to keep them running need to be boosted.

In 2023 we can expect investments – from governments, utilities and private companies – in charging infrastructure, energy storage and energy transmission.

Ensuring the EV transition is smooth isn’t just about building more EV chargers, although we’ll admit that’s a really important part. Charger maintenance will also be a priority next year. A separate study by JD Power earlier this year found that not only is the availability of public charging stations still a barrier, but often when you can find a charger, it’s broken. We anticipate that there will be some technology, either from newcomers or existing EV charger vendors, to help manage charger servicing, maintenance and upgrades.

With that in mind, every few months throughout 2022, we stumble across a startup or utility company screaming that the electric grid will never be able to handle all the electric vehicles we’ll see in 2023. You are probably right. So, in addition to the energy management infrastructure, we expect more vehicle-to-grid software.

In 2022, there were a few pilots, many of whom focused on V2G technology at home. Ford’s F-150 Lightning pickup is among the few vehicles that have promised to power your home in the event of a power outage. But we think as more fleets go electric, we’ll see these pilots on a larger scale in commercial settings.

The rise of EV fleets

We have already seen that many fleet operators are starting to introduce electric vehicles in 2022 as they aim to meet all the CO2 emissions targets they have set themselves. For example, Hertz plans to buy 65,000 Polestar vehicles, 100,000 Teslas and 175,000 General Motors vehicles over the next few years to meet its goal of having 25% of its fleet electric by the end of 2024.

In 2023, these purchases will only increase, especially as commercial electric vehicle manufacturers ramp up their production lines.

GM’s BrightDrop, for example, recently opened its CAMI assembly plant in Ontario, which is expected to produce 50,000 of its Zevo vans by 2025. BrightDrop has already received over 25,000 reservations from customers like DHL and FedEx working towards net zero goals.

Another commercial electric vehicle company, Canoo, plans to purchase a vehicle manufacturing facility in Oklahoma City to ramp up production of its lifestyle delivery vehicle and launch those electric vehicles next year for dedicated customers like NASA and Walmart.