Here are four distinct advantages that manufacturing EV has over manufacturing ICE vehicles.
Three motors 30 power configurations
The first great advantage that electric vehicle manufacturers have is the simple and yet powerful flexibility inherent in electric motors. A four-wheeled EV can have one, two, three or four motors. Multiple motors can work in tandem or power up each of the four wheels independently.
This gives the manufacturer the ability to offer multiple power options while only having to engineer, design and build a few motor types. An electric car manufacturer could engineer and build only three motors and yet, with only a little additional engineering, offer up to 30 different powertrain variants (not to say that all 30 would necessarily be optimal or offered, but it is possible). A traditional ICE manufacturer would be required to incur the cost of engineering and building many more engine sizes (horsepower ratings) in order to compete. Each IC engine would require its own manufacturing and assembly line. On the other hand, an EV manufacturer enjoys the simplicity of design and great economies of scale because it is producing many units of the same few motors.
The EV world is shying away from the term horsepower, and for good reason: See JB Straubel’s article: “Tesla All Wheel Drive (Dual Motor) Power and Torque Specifications.” However, for simplicity of explanation I will treat electric horsepower as if it were stable. An EV manufacturer could, for example, have three motor sizes 160 HP, 200 HP and 260 HP and yet be able to offer one vehicle with 160 hp, another with 360 hp, another with 520 hp, and yet another with 1040 hp, as well as many other possible powertrain variants.
This inherent simplicity of being able to build only a small number of motor types while being able to customize multiple powertrain outputs is a powerful advantage to EV manufacturers.
Streamlined, simplified powertrain
Another, more obvious, advantage EV manufacturers enjoy is working with a streamlined, simplified powertrain. A BEV has a much simpler powertrain compared to an ICE vehicle. The transmission is much simpler and more compact. Power can be placed closer to the wheel or wheels where traction is needed. And, EVs do not need mufflers or other exhaust systems.
This should give EV manufacturers the ability to reduce overall manufacturing costs over time.
No worries about emissions regulations
Another big advantage EV manufactures have is not being constrained by current or future governmental emissions regulations. An EV manufacturer does not need to worry about tailoring its product-offering to fit within some government specified emissions regulations, not now, nor in the future.
More profit to the manufacturer
A final great advantage EV manufacturers can currently enjoy is greater revenue (and potential profit margin) on each vehicle sold. EVs can, at present, command a premium price over their ICE counterparts because buyers know that they will be spending less on fuel, maintenance and mechanical repairs. This means that instead of revenue flowing to a gasoline company, a lube shop and an auto repair shop, that revenue flows directly to the EV manufacturer, allowing for higher margins.
The fact that the vehicle is electric means that it can command a $3 – $6,000 premium (or more) than its ICE counterpart. This shifts more profit from other market players and directly to the manufacturer. And, over time, as associated costs of EVs are reduced, this greater potential profit margin will continue to increase or, at the very least, stay the same as lower cost versions of EVs are introduced.
So, EV manufacturers can realize a greater gross profit margin on each vehicle sold compared to their ICE counterparts.
For all these reasons it is clear to see that now is a great time to be an EV manufacturer. Perhaps this is why VW group, GM and others are joining Tesla in pushing the sustainable transportation revolution forward.