Richard Kilgore, associate professor of management and business administration at Maryville University, offers insights into the auto industry’s transition from gas-powered to electric vehicles.

Volkswagen recent divulged plans to invest some $131 billion in developing its own models of electric vehicles, joining several other major automakers that have made similar announcements. Kilgore says the development signals a major shift in auto manufacturing away from vehicles powered by internal combustion engines, a transition that began with the success of Tesla.

Subsequent government initiatives such as the Inflation Reduction Act provided consumers with incentives for purchasing EVs, and major ad campaigns by manufacturers further sparked sales. 

The transition to EVs won’t be an entirely smooth one, however. Manufacturers face a highly complex challenge in capacity planning, requiring them to essentially maintain two companies side by side for a number of years. They’ll need to convince dealerships, the supply chain network and employees “to bear with us,” Kilgore says. “No one’s an expert on how the transition happens globally.” you 

In switching over to EV production, what comes first — supply or demand? Kilgore says industry must be confident that government is behind the transition, especially when it comes to domestic production. “All have a stake in making sure the auto industry stays strong for the sake of the economy.”

That said, the internal combustion engine isn’t going away completely anytime soon, Kilgore says. He envisions EVs as being used primarily by urban dwellers for relatively short trips, while ICEs will still be needed for long journeys or heavy hauls. The continuing dual nature of the auto industry for the foreseeable future will pose challenges to producers, including their ability to meet industry and regulatory targets for the switchover.

The technology for both batteries and charging stations must also advance in order for EVs to catch on in a big way, Kilgore says.