Why 2021 Will Be the Year Big Automakers Strike Back in Electric Vehicles

What will be hot for auto investors in 2021? Electric vehicles, of course -- but maybe not in the way they've been hot in the last few years.

In a recent appearance on Motley Fool Live, Industry Focus host Nick Sciple sat down with John Rosevear, the senior auto specialist for Fool.com, to look at some of the trends likely to unfold in the auto industry in 2021. As John explained in this video, recorded on Jan. 12, this year looks set to be the year in which the big global automakers -- after years of talk -- finally bring competitive battery-electric vehicles to market. 

A transcript is below the video. 

Nick Sciple: What is your first trend for automobiles in 2021?

John Rosevear: My first trend is -- we've been talking about this for years and years, but now it's actually happening: Electric vehicles, the momentum is accelerating.

When I say this, this is mostly not about Tesla's (TSLA 12.06%) stock price, which most certainly has accelerated. This is the part of the story where the empire strikes back, though. The Ford (F 0.08%) Mustang Mach-E is out. It is shipping. General Motors (GM -0.04%) just this morning announced a new brand to do all battery electric commercial vehicles, BrightDrop. They're starting with a van and with a funky device they developed working with FedEx that is basically an electric pallet mover. It looks like a filing cabinet on wheels almost, but it can move 200 pound packages at three miles per hour. Electric power, and it's connected. It can be monitored by the same logistics software that a company might use with a fleet of vans or whatever.

All of this is launching. They're going to ship the first vans by the end of the year to FedEx (FDX -2.09%), their lead customer here, and then they'll be more widely available next year.

We know Ford has both an electric F-150 and an electric Transit van, which will be a direct rival for this new BrightDrop lineup from General Motors. Those are coming soon. These two [Ford and GM] are the big players in the North American commercial vehicle market, one and two, right here. They're making aggressive, very well-funded moves to hold that [market] share as they move into electric vehicles.

That's just one small part of it. Volkswagen's (VWAGY -1.13%) momentum is picking up with electric vehicles in Europe, and in China they're going into overdrive. Meanwhile yes, to circle back to Tesla, Tesla's Shanghai factory is up and cranking. They're breaking ground in Germany and apparently in Texas for more factories. They think they have the demand to support that. Volkswagen is coming in, I think we talked about that. Honda (HMC -0.49%) has cut a deal with GM where GM is going to build two electric Honda SUVs-one Honda, one Acura-on their brand new electric vehicle architecture. There's just so much happening.

Ford said, "We're going to build 50,000 Mach-Es in the first year," and originally it was like, "I wonder if they'll be able to sell them," and now we're like, "I wonder [laughs] if that was anywhere near enough." The early reviews on the vehicle are terrific. They did a really good job on it from all we've seen so far. I haven't driven one yet. That's one of the hazards of the COVID pandemic, there are no auto shows so I can't go see all the vehicles and talk to the executives.

But these are automakers with giant capacity and giant budgets and giant resources and a century of experience engineering and developing vehicles that people like, and they are coming into EVs finally. The transition is really getting under way. It may be 20, 30 years before every new car is an EV, but they're going to be a lot more of them, and this is the year where you're really going to start to see it.