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THE FUTURE of the AUTOMOTIVE INDUSTRY

EULER HERMES just published a comprehensive report about the automotive industry. Please read a short summary here and find the link to the full report at the bottom:

Electric Vehicles (EV) enjoy a strong growth momentum: the worldwide stock could exceed 3 million cars in 2017 after crossing the 2 million unit threshold in 2016. China, the US, the UK, France, and Germany are in pole position. The magnitude of government subsidies, the expansion of the charging network, and battery prices will drive the growth of the electric car market.

China leads on EV sales growth and charging infrastructure development.

Forecast stock of electric cars will climb above 3 million units in 2017 on a double-digit growth trajectory.

While sales of battery-powered cars still represent a small proportion of the global market, the patterns of expansion are diverse. Annual EV registration will be growing +58% in 2017 and +41% in 2018. The largest contributors to electric vehicle sales growth are China, the US, the UK, France, and Germany. While growth momentum is set to remain strong in China (+80% in 2017), the US and Japan are facing a slowdown. By the end of 2017, China and the US will account for more than two-thirds of global EV sales.

The dispersion of growth rates across countries is driven to a large extent by policy and regulatory frameworks. The first includes fiscal incentives such as subsidies and tax exemptions. The latter refers to pollutant emission limits and restrictive measures on cars powered by an internal combustion engine (ICE) which runs on fossil fuels.

There is a strong correlation between the growth in penetration rates of electric cars and financial incentives.

Medium-term growth hinges on energy infrastructure and technological development. Available energy infrastructure is a key selling point for potential consumers of a battery-powered vehicle. The number of public charging stations has been on a steady increase in the last years, driven by the strong growth of fast chargers. China has the largest number of fast chargers in absolute and relative terms (136 per a thousand EV), followed by South Korea (67) and Japan (40). In stark contrast, countries like Germany (20 per thousand EV), the UK (18), France (15), and the US (10) lag in the deployment of energy infrastructure. Strong government support remains pivotal in ensuring network expansion. Private sector involvements could lead the next generation of charging infrastructure. A joint venture of leading German car makers is currently implementing a high-powered charging network along major highways in Europe.

Full Report here: Euler Hermes Automotive Research 09/2017