Easily one of the most impactful innovations in the modern age has been the rise and adoption of electric vehicles (EVs). Once seen as a novelty, EVs now represent a conspicuous element of major metropolitan roadways. Nevertheless, even top-tier sectors can always use some help, which is where the surging artificial intelligence industry comes into the picture. Through improved AI, engineers can foster positive outcomes for EVs and raise the investment proposition of their stocks.
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According to a September 2022 report by the International Energy Agency, “Electric car sales reached a record high in 2021, despite supply chain bottlenecks and the ongoing Covid-19 pandemic. Compared with 2020, sales nearly doubled to 6.6 million (a sales share of nearly 9%), bringing the total number of electric cars on the road to 16.5 million.”
Not surprisingly, “Sales in 2021 were the highest in China at 3.3 million (tripling 2020 sales), followed by Europe with 2.3 million sold in 2021 (up from 1.4 million in 2020). In the United States, electric car sales doubled their market share to 4.5% in 2021, reaching 630 000 sold.” Still, not everything about EVs rates so positively.
The Problems with EVs and Their Integration
Primarily, EVs remain too expensive. In early 2022, Kelley Blue Book revealed that the average price of a new EV jumped to $62,876. Given the pre-pandemic median household income of just under $70,000, EVs remain inaccessible to most consumers.
Second, the lack of charging infrastructure impedes mass-scale adoption. In the U.S., data from the federal government (from a 2015 study) indicates that 63% of all occupied housing units have a garage or carport. Nominally, though, this leaves millions of people without access to home charging.
Third, EVs need to be much more efficient to be net positive for the environment. As McKinsey & Company pointed out, “Increased EV adoption will affect more and different natural resources, as well as multiple industries, different geographies, and levels of carbon emissions.”
Fortunately, advancements in AI protocols should help bolster EVs and their stocks.
AI Protocols to Lower the Cost of Entry
While AI initiatives don’t directly lower EV prices, they can impart numerous improvements that ease the burden on consumers’ wallets. According to information technology publication CIO, AI commands the ability to respond faster than humans, automate complex and/or time-consuming processes, and enable companies to do more with less and expand their operations.
Indeed, the latter point may be beneficial to companies like Tesla (NASDAQ:TSLA), which began announcing layoffs last year. Improved AI integration may also help embattled organizations like TuSimple (NASDAQ: TSP), which specializes in autonomous truck driving technologies. By delivering a greater volume of products and advanced services to market quicker, corporate beneficiaries can potentially pass down savings to the end user.
Improved Efficiencies a Key Benefit of AI
With the global EV rollout occurring in earnest, investors ought to consider infrastructure developers such as ChargePoint (NASDAQ:CHPT). Again, with only 63% of residences in the U.S. having access to a garage or carport, that leaves CHPT with a very large total addressable market. Nevertheless, more charging stations alone may not solve the EV integration problem.
Mainly, the convenience factor stands to impede both EVs and their stocks. As Circuit Digest pointed out, even at a Tesla supercharging station, an EV may take up to 75 minutes to reach full charge. That’s not going to appeal to drivers of combustion-powered cars, who only need a few minutes to fill up.
However, IT expert Satyajit Sinha stated that “artificial intelligence is analyzing battery usage, recharge data and constructing a mathematical model to optimize the fast-charging capabilities without compromising the life span of the vehicles, which is improving battery performance and battery life cycle management, including driving range and charging time, and life span of the vehicles.”
Promoting Better Environmental Outcomes
As TipRanks contributor Yulia Vaiman pointed out, EVs alone won’t save the world, as climate change represents a complex problem. As she mentioned, EVs use plenty of critical resources, thus creating two major challenges.
First, increased demand for zero-emissions vehicles leads to sharp spikes in battery costs. In turn, the commodities that undergird said batteries – namely cobalt and nickel – have become pricier.
Second, Vaiman noted that “child labor issues in the cobalt mines of Congo push away Western producers, while the low grade of Indonesian nickel (about 40% of global output) requires a lengthy smelting process with extra high carbon emissions – defeating the very purpose of the ‘green’ battery-making.”
In other words, EV manufacturers may be better off enhancing the efficiency and lifespan of their products, and that’s exactly what improving AI brings to the table. According to scientific journal Joule, AI algorithms and controllers “can provide a realistic driving-range estimation and optimize energy conservation, which can add extra driving range and reduce consumer ‘range anxiety.’”
The Takeaway: Improvements in AI Crucial for EVs and Their Stocks
Fundamentally, advancements in AI protocols don’t natively enhance EVs. Rather, they work with what is available, making the underlying products more efficient. In this manner, AI can mitigate resource consumption while still contributing to greater EV integration through reduced costs.
