This morning 30th Sept 2024 we find on newspapers the alarming situation of Stellantis and Aston Martin whose shares drop sharply after profit warnings amid China woes.
A few days ago we heard that Volkswagen issued second profit warning in three months on weaker sales, thus the carmaker looks to close plants in Germany for the first time in its 87-year history.
All this seems to be caused by the drop of electric vehicles sales and/or misalignment between EV sales forecast and the reality of facts, in particular after the end of governmental incentives for EVs.
As the readers of the EPN Consulting Newsletters may remember, I have always been very sceptical about the fast transition of mobility from conventional Internal Combustion Engines (ICE), announced a few years ago, which pushed car markers to make too optimistic predictions about ceasing the ICE-based production soon: some of them theorised even by 2025, the majority of them by 2035.
In the European Union this transition was approved on 8th June 2022 (Fit for 55: MEPs back objective of zero emissions for cars and vans in 2035). To know more, you can read this article: “EU ban on the sale of new petrol and diesel cars from 2035 explained“.
The problem is that such dramatic transitions need much longer times to be implemented: car makers need time to reorganise their business models, change their production systems and providers, upgrade plants, whereas customers firstly need time to accept the idea and agree on the change of habits. Refuelling an ICE vehicle takes a few minutes and can be done virtually everywhere, while charging vehicle batteries may take tens of minutes and can be done only where charging infrastructures are available. But, much more importantly, customers need incentives/money to comply with this change as EV have a much higher purchasing cost than ICEs.
It is not a surprise reading that Norway boasts the highest number of circulating EVs, thanks to appropriate levels of contribution given to citizens to buy an EV.
A few months ago Mercedes announced that intends to continue producing ICE-equipped vehicles even if they have already a good catalogue of EVs.
It seems that in Europe nobody really considered the power of China in this sector. The majority of batteries worldwide are produced in China, the majority of electric buses serving our cities are from BYD (Build Your Dreams), some electric cars in Europe, although they have a European brand – such as the British MG, they are actually owned by Chinese companies.
Probably, governments and car makers have not properly assessed the overall transition process and now we risk of having Europe-based car manufacturers either collapsing or being bought out by Chinese investors, reducing all the know-how on vehicles manufacturing that use to make Europe outstanding worldwide.
In the 19th century Europe was leading the electric vehicles technology: in 1832 the Scottish inventor Robert Anderson invented the first “Electric Carriage”. Times have changed…
More info on the history of electric vehicles is here .
Stefano Mainero
EPN Consulting and EPN Consulting Research and Innovation Founder & CEO
Article written by human beings without any use of AI. EPN Consulting Ltd. copyright 2024