1 Feb 23

German automakers want to turn the tide in the US in 2023

German giants want to increase the US electric vehicle (EV) market in 2023, and they want to use numbers and technology. 

The US EV market witnessed remarkable growth, with a 66% increase in 2022, creating a promising market for global EV makers for 2023. The EVs sold in the US market in 2022 hit 808,619 units. Most importantly, according to Barron's, the penetration of new EV models significantly increased, from 18 models in 2021 to 30 EV models exceeding 1,000 unit sales. 

The dynamics of the US EV market have started to challenge the dominance of Tesla, despite being far ahead of its competitors. Tesla represented 65% of the new EV sales in the US market at the end of the year, dropping from 72% last year, says Barron's. Tesla Model Y and 3 finished the year as best-selling models, followed by many US rivals, and Volkswagen and Hyundai. 

The new year is already quite hectic for the US EV market. Michigan is hoping to seize the opportunity of housing CATL's $5 bn battery plant. In comparison, General Motors (GM) decided to jointly invest $650 m with Lithium Americas to develop a lithium mine in Nevada to further shift balances in the industry. Ford, which became the 11th best EV seller in the US market in 2022 with 15,617 F-150 Lightning sales, according to Cox Automotive, has been hit by the Tesla price cut shockwave, dropping the price up to $5,900. 

What are the German plans? 

The US market is one of the three major battlegrounds for EV makers, and German giants are keen to expand their influence while keeping a clear strategy. This could be said by looking at Volkswagen's reaction to Tesla's price cuts. According to Autonews, VW Group CEO Oliver Blume pushed aside the idea of joining the bandwagon and said they will rely on their reliability while embracing a clear price strategy, reports InsideEVs. A peek at the strategies of German automakers shows that they will be more focused on EV infrastructure and connected vehicle tech to challenge rivals in various segments, not just in prices. 

BMW: BMW announced that the brand sold 15,584 EVs in the US in 2022, and it expects this number to become threefold this year. i4 eDrive35 will be the flagship model of BMW, tempting customers between mid and high-budget options, with a starting price of $52,000. The BMW lineup will also include iX and the i7, and the i4 xDrive40, expected to go on sale in 2023. 

Volkswagen (VW): Not intimated by the Tesla price cut, VW is focusing on expanding its charging infrastructure in the US and worldwide. VW recently announced that the company and its partners installed over 15,000 high-power charging (HPC) points globally in 2022. By 2025, VW wants to reach 45,000 HPC in three main markets, reports InsideEVs. These geographies are the main EV battlegrounds of Europe, North America and China. VW's goal is to increase its strength in a 'high-potential business area of the future', which is a part of the "New Auto Strategy" of the company. The strategy combines all EV-related tech and new mobility solutions, aiming to meet the demands of future generations, including autonomous driving. 

Mercedes-Benz: Challenging Tesla in its home market would require some hot tech, and Mercedes-Benz knows it. That is why the brand recently announced the success of Level 3 autonomous driving technology, which represents automated driving under driver monitoring (eye on the road). Announced in CES 2023, Mercedes' Drive Pilot technology has been approved by Nevada, allowing the car to cruise at a max speed of 40 mph (65 km/h) while the driver needs to keep his face visible to the camera. Mercedes-Benz cars will also use Level 2 Automatic Lane Change (ALC) technology, enabling vehicles to make automated lane changes. 

Like VW, Mercedes-Benz is also working on a global charging network on its own, intending to install 2,500 fast-charging stations in North America by 2027. The global charging network will have 10,000 charging points, mainly in Europe, and China, following the North American market. This strategy supports the goal of selling all-electric vehicles by 2030. 

A new headache for Tesla? 

That might be too dramatic to say. In the significant EV markets, all players display their cards and confidently deploy their strategies under careful planning. Lessons of 2022 are well learned, and now automakers are challenging each other in all fields of the EV market. The statistics display a growing competition driven by Tesla, resulting in a higher EV adaption. Tesla is expected to grab 4% of the US and Canadian markets in 2023 and improve the 2% in Europe it achieved last year. 

According to Bloomberg, the US market may also become the main stage for zero-emission vans and trucks, following the high number of orders from various manufacturers, including GM's BrightDrop, Tesla and Volvo Truck. Besides the prices, the US EV market will likely witness many developments in tech, charging infrastructure and commercial fleets in 2023. 

The main image is courtesy of Mercedes-Benz. The in-article images are courtesy of Statista and Mercedes-Benz, respectively.

Authored by: Mufit Yilmaz Gokmen