The countdown is on – five more days until the $7,500 federal EV tax credit disappears, potentially forever. California tried to step in to fill the void but fell short, and automakers are already adjusting production levels to meet the expected decrease in demand.
For those who were planning to purchase an electric vehicle in the near future but haven’t made the move yet, missing out on the $7,500 point-of-sale discount can sting. However, the impact of the tax credit has had lasting effects, particularly in driving down the costs of developing and producing essential EV components like batteries. As we approach the end of the line, it’s becoming clear that price parity between electric vehicles and traditional internal combustion engine cars is within reach.
In the world of electric vehicles and automotive technology, welcome back to Critical Materials, your daily source for all things electric and tech-related in the automotive industry. In addition to discussing the imminent end of the EV tax credit, we’ll also explore China’s innovative new regulations on door handles and BMW’s commitment to keeping its sedans in the market.
The end of the $7,500 federal EV tax credit marks a significant milestone in the evolution of electric vehicles. This incentive has played a crucial role in boosting EV sales, generating consumer interest in battery technology, and enabling automakers to reduce production costs through economies of scale. Now, as we enter 2025, electric vehicles are on the brink of standing on their own in the marketplace.
Volvo’s upcoming EX60 serves as a prime example of this shift towards price parity with gasoline-powered vehicles. CEO Hakan Samuelsson has emphasized that Volvo’s latest electric offering represents a major step towards achieving price parity without relying on subsidies or temporary discounts. By leveraging the resources from its previous generation of EVs, Volvo developed the new SPA3 platform, designed specifically for electric vehicles. This platform incorporates in-house motors, high-density batteries, structural battery packs, megacasting, and shared components across Volvo’s lineup, resulting in significant cost savings. Volvo anticipates an 8% to 10% higher profit margin compared to its earlier electric models.
While Volvo is leading the charge towards price parity, industry analysts predict that the entire EV market will reach this milestone in the next few years, potentially by 2026. As automakers adjust to the absence of the EV tax credit, we are already witnessing signs of price convergence. Over the summer, as manufacturers offered discounts to clear out existing EV inventory before the tax credit expiration, the average transaction price of electric vehicles in the U.S. surpassed that of traditional gas-powered vehicles for the first time.
Furthermore, advancements in battery technology are accelerating this transition. CATL, one of the world’s largest EV battery suppliers, is on the verge of introducing sodium-ion battery packs priced at just $40 per kilowatt-hour, making them a cost-effective alternative for electric vehicles.
In conclusion, while the end of the $7,500 federal EV tax credit may signal the closing of one chapter, it also marks the beginning of a new era where electric vehicles are poised to compete on equal footing with their gasoline counterparts. As automakers continue to innovate and drive down production costs, price parity between electric and traditional vehicles is no longer a distant goal but a tangible reality on the horizon.
Electric vehicles (EVs) have seen a surge in popularity in recent years, with more and more consumers opting for these eco-friendly cars. One of the main factors driving this trend has been the availability of government incentives and tax credits for EV buyers. However, with the recent expiration of the federal tax credit for EVs, the industry is facing a new challenge.
But there is a silver lining on the horizon. Volvo CEO Hakan Samuelsson recently announced that the company is working on developing a new lithium iron phosphate (LFP) battery pack that is 20% cheaper than its current offerings. This significant cost reduction could potentially lower the price floor for EVs by making the most expensive component—the battery—more affordable.
While the loss of government incentives may deter some buyers in the short term, Samuelsson’s words ring true: “Electrification will be driven by better cars.” By focusing on improving the technology and making EVs more accessible to a wider range of consumers, the industry can continue to grow and thrive.
China’s New Door Handle Guidelines
On a related note, China has recently proposed new guidelines for vehicle door handles in an effort to enhance safety and usability. The Ministry of Industry and Information Technology has put forth draft rules that require all door handles, both internal and external, to have mechanical backup releases. This is a move aimed at ensuring that futuristic-looking handles do not compromise on safety.
The guidelines also specify that external door handles must provide adequate hand operation space and that internal mechanical door releases must be easily identifiable and actuated without the need for tools. These requirements are a step in the right direction towards ensuring that door handles prioritize functionality and safety over aesthetics.
Automakers have often prioritized design and innovation in door handles, sometimes at the expense of usability and safety. The new guidelines from China aim to address these issues and strike a balance between technological advancement and safety concerns.
Rong Hui, Deputy Director of the China Automotive Standardisation Research Institute, explained that the standards were developed in collaboration with industry stakeholders and aim to respond to new technologies and safety requirements. The focus is on regulating door handle structural types, ensuring functionality during power loss, and standardizing handle placement with clear safety markings.
Overall, the proposed guidelines represent a practical and necessary step towards improving the safety and usability of vehicle door handles. Automakers may need to make significant redesigns to comply with these regulations, but ultimately, the goal is to create a safer and more user-friendly driving experience for consumers.
As the EV industry continues to evolve and innovate, initiatives like Volvo’s cost-effective battery pack and China’s door handle guidelines play a crucial role in shaping the future of electric vehicles. By prioritizing safety, affordability, and functionality, the industry can continue to drive electrification forward and make sustainable transportation a reality for all.
China, of all places, is reminding the auto industry of that. The automotive world has been quietly killing off sedans for the better part of a decade. Chevy bailed on the Malibu, Ford axed them completely, and Nissan just swore off a pair of electric sedans because it didn’t think anyone in the U.S. would buy them. Low-slung, four-door cars are an endangered breed—unless you’re BMW, that is.
While other automakers are cranking out crossovers aplenty, BMW’s design leadership has honed in on what’s core to the brand: sedans. It might seem crazy, but Oliver Heilmer, the senior designer behind the BMW Neue Klasse design language, pinky-swears that sedans aren’t going the way of the dodo.
Here’s what Heilmer told Go Auto during a recent interview:
Mr Heilmer particularly backed the role of the sedan for BMW, which the design chief sees as truly core to BMW’s DNA.
“A couple of years ago, you might have thought the sedan is something that might disappear,” he said.
“But it’s quite stable to be honest. Now it’s something where we are setting a statement. We have said BMW is standing for sedans. A small, sporty, elegant, midsized sedan is the core of the (BMW) brand.”
BMW’s next model to be revealed will be the i3 sedan. While it revives the dormant badge of an experimental hatchback, the new model is a 3 Series sedan with a BEV powertrain, featuring Neue Klasse design language and using [the Neue Klasse Platform].
In a weird way, it makes sense. BMW knows its buyers, and it knows its brand. Hell, the automaker’s entire reputation was built on four-doors that drove like sports cars (remember its slogan—”The Ultimate Driving Machine“?), so pivoting away sedans would be like Burger King deciding it was time to retire the Whopper. While other marques have been faced with a challenge of crossovers or sedans, BMW has instead embraced both, and in 2024, 35.4% of the company’s sales were from sedans.
Neue Klasse will naturally carry the sedan torch into the future, and it will do that using the classic three-box design, according to Heilmer. He even hinted that wagons are gaining more ground in the U.S., which could mean that America might see more Touring models to bridge that sedan-crossover gap in the future:
“[W]hat we have learned is that the station wagon is becoming more popular in the United States,” Heilmer told Go Auto. “And then we are reacting [to] it.”
Will it pay off? Maybe. Hopefully. The world’s insatiable hunger for SUVs and crossovers shows no signs of being satiated anytime soon, but that doesn’t mean BMW needs to feed the addiction.
And, sure, crossovers might be the financial backbone for many automakers—BMW included—but sedans still play a crucial part in appealing to certain consumers. China, with its growing love for luxury sedans, is a perfect example of why BMW’s commitment to sedans might just pay off in the long run.
Who wouldn’t want to see more of these sleek and stylish vehicles on the road?
But while wagons may be making a comeback, sedans seem to be losing their popularity in today’s market. With SUVs and crossovers dominating sales, many automakers have shifted their focus away from traditional four-door sedans. However, BMW is one brand that is determined to keep sedans alive and well in its lineup.
BMW has a long history of producing some of the most iconic sedans in the automotive world. From the classic 3 Series to the luxurious 7 Series, BMW has always been known for its commitment to building high-quality, performance-oriented sedans. By continuing to offer sedans alongside its SUVs and crossovers, BMW is staying true to its brand heritage and ensuring that it doesn’t become just another indistinguishable SUV maker with its roundel hood.
But why are sedans so important to BMW’s brand identity? For one, sedans have always been a cornerstone of BMW’s lineup, with the 3 Series in particular serving as a gateway into the brand for many customers. The 3 Series has long been praised for its driving dynamics, luxurious interior, and overall performance, making it a favorite among enthusiasts and casual drivers alike.
Additionally, sedans offer a level of sophistication and elegance that SUVs and crossovers simply can’t match. With their sleek profiles, refined interiors, and sporty handling, sedans exude a sense of class and style that is uniquely BMW. By continuing to offer sedans in its lineup, BMW is able to appeal to a wider range of customers who value performance and luxury in a more traditional package.
Furthermore, sedans allow BMW to showcase its engineering prowess and technological innovation in a way that SUVs and crossovers can’t. With their lower center of gravity and aerodynamic designs, sedans are inherently better suited for high-performance driving and handling. BMW’s lineup of sedans, including the M3 and M5 performance models, are a testament to the brand’s commitment to pushing the boundaries of what a sedan can achieve.
In conclusion, by keeping sedans alive in its lineup, BMW is preserving its brand heritage and staying true to its roots as a manufacturer of high-performance, luxury vehicles. While SUVs and crossovers may be dominating the market, BMW’s dedication to offering sedans ensures that it remains a distinct and iconic brand in the automotive world. So the next time you see a BMW sedan on the road, remember that it’s not just another car—it’s a symbol of tradition, innovation, and the driving experience that sets BMW apart from the rest.