The automotive industry has always been a site of innovation and change. With the shift towards sustainability becoming more palpable by the day, the most notable transformation in the industry is the unprecedented growth of electric SUVs and trucks. Why are automakers focusing more on larger vehicles? Let’s find out.
The 2020s: Transforming EV Trucks & SUVs
The early 2020s have been a game changer for EV trucks and SUVs.
Back in 2011, a little company named Rivian was born, but it didn’t burst onto the auto scene until 2017, when it went public. In 2018, Rivian revealed its first products: The R1T EV Truck and R1S EV SUV. A year later, Ford invested half a billion in the fledgling EV maker. While current economic headwinds have impacted the company, it’s progressing towards profitability and its vehicles are reviewing well.
Rivian’s hardly the only automaker seizing the moment with regards to EV trucks and SUVs. Ford made headlines when it released the F-150 Lightning in mid-April of 2022, giving consumers an EV take on one of its most popular trucks. The Ioniq, a compact SUV, has been a flagship model for Hyundai’s EV efforts. Similarly, Volvo’s Polestar 2, a hatchback, has made waves recently.
These vehicles vary in myriad ways, but all share an important similarity: They’re on the larger side. They’re certainly bigger than the EV sedans and compact cars that dominated the 2010s, like the Prius, Nissan Leaf, Chevy Bolt, Tesla Model 3, etc. So, why are EV trucks and SUVs rising in popularity?
Exploring the Core Factors Behind the Growth of Electric SUVs & Trucks
Automakers have plenty of reasons to invest in larger EVs:
- It’s an untapped market. Until recently, most automakers weren’t making larger EVs. That left automakers eager to edge in on Tesla’s EV dominance with an obvious opening, especially as Tesla’s Cybertruck got delayed to 2024.
- Governments expect an all-electric future. We’ve written about various regulations to eliminate fossil fuel vehicle production, like California and the EU’s 2035 EV manufacturing deadlines. Companies already investing heavily in EVs, such as Ford, stand to benefit from doing the research and development (R&D) for bigger vehicles sooner rather than later.
- Bigger EVs means no need to try and get more range out of smaller batteries. American consumers tend to prefer long ranges for their EVs — 300 miles or more (whether or not they’d actually use all that range is, of course, another matter). As automakers battle to squeeze more and more range out of smaller batteries, trucks and SUVs that can utilize larger batteries can help ease production.
- Larger cars typically have better profit margins. Bigger vehicles tend to have larger price tags, despite not costing much more to make than smaller alternatives. As a result, automakers stand to increase profits by making electric trucks and SUVs. Those extra profits will come in handy as automakers invest increasing amounts in EV R&D.
- EV trucks and SUVs could expand beyond their traditional markets. Electric SUVs and trucks give automakers a blank slate to “start over” with how they market larger vehicles. The opportunity to revamp the narrative around larger cars as “gas guzzlers” is a once-in-a-technological-revolution opportunity for automakers (hence the Hummer EV. We mean… c’mon, Hummer.).
Given the above, it should come as no surprise that automakers are increasingly investing in electric trucks, SUVs, and hatchbacks.
From Compact to Mid-Sized: The Transition of Automakers
All that said, it’s important to note that this transition to larger EVs isn’t a total abandonment of smaller electric cars. Instead, it represents a strategic shift by automakers to meet evolving consumer demand and regulatory requirements.
The Nissan Leaf, Chevrolet Bolt, and Tesla Model 3 have proven that compact EVs can be successful. This year, Toyota released a newer, sleeker take on the Prius with its 2023 model (and to high praise). Other automakers, like BMW and Lucid, have invested heavily in EV luxury sports cars and sedans instead of bigger models.
Smaller EVs still have plenty of space to thrive in the current market, but a commitment to manufacturing larger electric and hybrid vehicles denotes that automakers are more willing than ever to engage with the premise of a future where every make and model is fuel-free.
Consumer Demand and Infrastructure: Key Drivers for Electric SUVs and Trucks Growth
Increasing consumer demand, rapidly-expanding incentives for EV development, and the expansion of EV charging networks underpin the growth of Electric SUVs and trucks.
For decades, EV adoption has lagged due to consumer concerns about range efficiency and higher price tags for EVs than fuel vehicles.
Now, those concerns are being addressed. The development of EV charging infrastructure across the U.S., in conjunction with expanding ranges for EV vehicles, should help placate consumers concerned about EV range.
Similarly, incentives to make EVs more cost-effective — such as the EV tax credit included in the recent Inflation Reduction Act, which can save consumers up to $7,500 on their federal taxes for purchasing an EV — also stand to help more consumers afford electric vehicles.
The Road Ahead
As we navigate through 2023, we can expect to see more automakers incorporate bigger electric vehicles into their product lines. Market forces, policy initiatives, and changing consumer preferences have all combined to steer automakers toward larger EVs.
The growth of electric SUVs, trucks, and mid-sized cars signifies not just a shift in vehicle size, but a significant step towards a more sustainable future in the automotive industry. As more automakers join the fray, we can expect to see even more innovation and exciting developments in this space.
