Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.
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September 11, 2023
The Changing Electric Vehicle Landscape
The EV revolution is continuing with all the support and directives governments can mount. Still, we have seen some slowing of the momentum, which promotors will say is more about overall economic growth trends and concerns. But the biggest news about this revolution is that the Chinese are becoming larger players with better and cheaper vehicles than they previously offered. Fifty Chinese EV companies, twice the previous number and the largest contingent to attend any global auto show, were at the recent Munich auto show. The EV landscape is changing, and like how China has taken over the solar panel market, onshore and offshore wind components and installations, and the lithium-ion battery market, EVs are their next target. The legacy auto company managers are beginning to wake up to the new competitive landscape. What can they do about it? READ MORE
The Changing Electric Vehicle Landscape
A recent article by INSIDEEVs reported on June 2023 global sales of electric vehicles (EV) along with how they fared during the first six months of the year. The headline summed up the market’s health: “Global EV Sales In June 2023: Over 1.26 Million Plug-In Cars Sold – It was almost a new record, marginally behind December 2022.” That sounds pretty good, no? But no record? Is that because there is no Christmas in June? Or maybe it’s because EV buyers, wanting to maximize subsidies they can receive when buying these costly vehicles and fearing reductions in 2023 rushed to buy in December?
With June sales falling below last December’s, is there a problem in EV land? The June and year-to-date EV sales figures would suggest that if there is one, it is not obvious. June sales were up 38% over last year, and the six-month figures were 40% higher than for the first half of 2022. Sounds like a healthy market. Unfortunately, because not all automakers release monthly sales it is hard to know about market conditions monthly.
What is changing is the competitive landscape for EVs. China is leading the charge both as the largest EV market on the planet and now as its auto companies are crashing western automobile markets ‒ except the U.S. The IAA Mobility auto show in Munich, Germany demonstrates just how much the EV playing field is changing in Europe, and is a precursor of a changing worldwide market.
Chinese EV manufacturers stormed the auto show, setting up in 50 company booths. That is not only twice the number that showed up at the last show, but it also is the largest number of Chinese EV companies to attend any global auto show. Forget Paul Revere’s cry “The British are coming!” Now it’s “The Chinese are coming!” And because the Chinese EV companies have prized battery efficiency over vehicle bigness, the industry hopes to gain market share with lighter, cheaper models.
Before the Munich auto show, Luca de Meo, CEO of auto manufacturer Renault, told a French radio show audience, “It’s clear that they are more competitive in the electric car value chain. I think they are a generation ahead of us.” His message to his competitors was: “We need to catch up very, very quickly.”
Yes, global auto manufacturers are coming to understand that China’s autos and its EVs are suddenly in a different league than they were a few years ago. Their cost and quality progress are reminiscent of how the Japanese auto industry evolved – from small, poor quality cars to now providing some of the highest quality vehicles in the global market covering the entire range of models, and they are lower cost.