As environmentalists continue the push for carbon-free environments, vehicle manufacturers have been responding by delving into environmental friendly electric vehicles production.
But as the push garners momentum, countries and companies, scattered across continents, are moving faster than others, not only to secure the environment, but also to secure their share from the $802 billion emerging market.
Nidec, a Japanese automaker is planning to set up a 200 billion yen ($1.9 billion) Electric Vehicle (EV) factory in Serbia.
The Nikkei news tabloid reported that Nidec founder, Shigenobu Nagamori wants a 35% market share for energy-saving electric motor technology known as e-axle or e-drive by 2030. The technology is expected to yield $30 billion growth a year, and make electric vehicles more affordable.
The factory is expected to deliver annual production of between 200,000 and 300,000 units when it opens in 2023, according to Nikkei.
The International Council on Clean Transportation in Washington said carbon dioxide from vehicles accounts for 17% of global carbon dioxide emissions. A situation which has in recent times, spurred the push for electric vehicles.
However, Europe and Asia have become top destinations for EV carmakers seeking market shares.
In 2019, leading EV manufacturer, Tesla, unveiled its Shanghai China plant, with a 250,000 production target in the South Asian country. China has become a huge market for New Energy Vehicle (NEV), and the American company is poised to take advantage of it.
In 2018, 1.3 million NEV were sold in China, coupled with Chinese government’s incentives, it opened ways for further interest. The Chinese government introduced a purchase tax exemption to encourage consumers to embrace EVs coming from plants in China.
General Motors (GM) is another American company winning big in the Chinese market. In August, Tesla and GM sold nearly a total 27,000 cars. Tesla sold 11,000 of its made-in-China Model 3 sedans while GM sold 15, 000 of its micro EVs.
There has been consecutive month-on-month increase since January to affirm the endearing progress of the American EV companies in China that others in Europe are planning to step into the Chinese market. So far, Tesla has over 69,178 deliveries of vehicles from its Shanghai factory this year, despite the strains of COVID-19.
Volkswagen is planning to launch almost 70 new electric vehicles in the next 10 years, which will yield 22 million cars. The German company said the projected number of vehicles will be built in its different electric platforms, which includes a plant it is planning to establish in China.
The plant, which is to be situated in Shanghai’s Anting town, will have the output capacity of 300,000 units per year, with an investment cost of 17 billion yuan ($2.5bn).
Volkswagen’s German rival, BMW, is preparing to export its electric iX3 model, produced at a joint venture plant in Shenyang, China, to Europe.
With its giant market size, China is home to over 86 electric vehicle companies.
While China seems to be the ultimate destination for EVs for now, Nidec’s move to Serbia, and Tesla’s recent plan to establish plants in Europe, following move to export vehicles from China to Europe, underscores the struggle of big players in the industry to grab larger shares in the market that its future appears to be hanging in Asia and Europe.
The German government has begun to follow the steps of China by introducing subsidies up to 9,000 euros for buyers of electric cars, including Tesla’s Model 3. The incentive is part of the government’s larger plan to attract electric vehicle manufacturers as the call for cleaner energy gets louder.
While the United States boasts of Tesla and some other upcoming EV manufacturers, its taxes and cost of production have spooked carmakers from Europe and Asia.
Unfortunately, in the electric vehicle market, Africa is not heard of. Infrastructural deficiencies, such as poor electricity is a deterrent for consumers. Also, the continent is running a non-tech-based economy that has no regard for the quest for a carbon-dioxide-free environment.
Nigeria, Africa’s largest economy has a 90% oil-based GDP, and has been kicking against every attempt to eliminate combustible vehicles.
As the number of electric vehicles increases around the world, the economic impact increases too. So far, Asia and Europe are leading the pace of the environmental friendly industry that is fast changing the tide in the energy ecosystem.
The global electric vehicle market was valued at $162.34 billion in 2019, and is projected to reach $802.81 by 2027, according to data from Allied Market Research.
Asia-pacific is the highest revenue contributor accounting for $84.84 billion in 2019, and is expected to reach $357.81 billion in 2027. North America is expected to have revenue of $194.20 billion by 2027.
The AMR said Asia-pacific and Europe had a combined 78% share in 2019, with former accounting for 52.3% share. North America and Asia are expected to see improved Compound Annual Growth Rates (CAGRs) of 27.5% and 25.3% respectively. The cumulative of these segments was 40.1% in 2019, and it is anticipated to reach 51.0% in 2027.
There is expectation of increased market share in Europe due to government policies supporting environmental calls to phase out combustible vehicles. Countries like France have already set a 2050 target for total elimination of vehicle emission.