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3 Electric Vehicle Trends Driving Automotive Innovation

Will electric vehicles replace internal combustion engines? In this article, we’ll explore 3 EV trends driving automotive innovation.

EV Trend #1: Better Batteries & More Charging Stations

Historically high battery prices and limited charging stations previously stunted mass adoption of EVs. But this is changing. As consumers demand more affordable — and sustainable — vehicles, manufacturers are investing heavily in research and development related to improving battery life.

As the chart below shows, investments into companies associated with electric-vehicle battery production are trending upward, more than tripling from 2018 to 2021. With more innovations, battery prices decrease and so does the price of EVs. This makes them a more attractive option to consumers — especially as gas prices remain volatile in many parts of the world.

What’s more, local governments in North America, Europe, and Asia are starting to incentivize EV charging stations to increase availability across territories. This way, consumers can rest easy knowing they’ll be able to recharge their vehicles while out and about. For example, California offers rebates up to $4,500 for EVs and is actively adding more charging stations across the state (it currently features 13,694).

EV Trend #2: Industry-Wide Shift Toward Sustainability

As the world continues to heat up and extreme weather events become the norm, one thing is certain: the impacts of climate change are undeniable. Emissions from fossil fuels and deforestation pollute the planet, worsening air and water quality along the way.

In the United States, personal vehicles account for one-fifth of greenhouse gas emissions. And consumers are starting to hold themselves accountable. A recent study shows public interest in automotives is shifting not only towards affordability, but also sustainability.

Currently, Tesla leads the EV market, followed closely by Toyota, but chances are it won’t maintain its dominance for long. Other car manufacturers are adding EVs to their lineup. The graph below highlights the most active companies in the EV space based on patent activity. These include Hyundai, Kia, and Ford.

Noticeably absent is Telsa, which is intentional. In 2014, Elon Musk stated he isn’t a fan of the concept. Instead of relying on patents, the company uses trade secrets to further its innovation strategy.

EV Trend #3: Increasing Patent Applications & Investments

Currently, the United States leads the EV market, however patent data suggests that by 2030 the Asia Pacific market will dominate. This is because of Asia’s focus on pollution control, government laws, and capital investment from large automaker organizations. 

Furthermore, global patent trends in the EV market are promising, indicating strong market interest in its development. In 2020, more than 18,000 patents were filed in the EV space, with an average grant rate of 50%.

Plus, consumers aren’t the only ones investing in EVs. Investors are also eager to fund new developments. As the graph below illustrates, in 2021 $81 billion was raised across 800 deals.

Currently (mid-2022), the market is sitting at $15.26 billion in funding and is expected to reach more than $100 billion by year’s end. These EV investments primarily focused on the development of autonomous driving, customization, and sustainability (such as longer battery life, charging stations etc.).

Closing Words: EVs are Here to Stay

As the trends above illustrate, investment activity, technological advancements, consumer preferences, and climate concerns are all influencing the EV industry. As these cars become more affordable and convenient (in conjunction with widespread charging stations), consumer adoption will continue to increase.

The bottom line? The race toward a more sustainable future is on and EVs are leading the way.

To learn more about the EV market and what’s next for the automotive industry, download our Automotive 3-Part Deep Tech Report. This report explores the historical and current business challenges, patent and technology trends, EVs, ICEs, and autonomous vehicle trends.