The EV, symbol of a shift in world power?
Sales of electric cars are exploding on a global scale. Last year saw an increase of 60% compared to 2021 with nearly 11 million vehicles put into circulation. It’s simple: EV now account for 13.2% of all global sales, having thus tripled in 2 years since 2020. Germany, Great Britain, France and China are the most important users.
Obviously, this phenomenon will have universal repercussions and will have crucial effects both on the environment of course, and on the economic and geopolitical levels. In 2022 alone, these electric and hybrid vehicles will have reduced oil consumption by around 4% overall. It must be recognized that the electric car of today is becoming much more efficient since its average range is 425 KM, knowing that this progression will continue again this year which promises them a range of 580 KM.
The other fundamental event considerably reinforcing the attractiveness of the EV was the collapse of more than 85% (since 2010) of the cost of the battery because it still constitutes a third of the overall price of this type of vehicle. The hyperbolic increase in demand logically made it possible to increase battery production by 40% in 2022, which should even be multiplied by 5 by 2025. Make no mistake as this constantly increasing demand of batteries for EV represents one of the most notorious industrial challenges of our contemporary history.
Supply chains, international competition between industrial heavyweights, the balance of business, interstate political relations, in short, a new sharing of power, will result from this because – at present – 5 out of 10 batteries produced at the level worldwide are “Made in China”.
Thanks to giants such as CATL and BYD and to a national market where now 1 out of 4 vehicles sold is electric with 6 million sales in 2022 – double that of 2021 – the Chinese market is twice as large as Europe and 5 times more than the United States.
This strength of its domestic market and its considerable lead in terms of battery manufacturing has thus authorized China to export 165% more vehicles abroad in November 2022 compared to November 2021. Chinese manufacturers are therefore competitors of size at the global level and a company like BYD is generating a real revolution by positioning itself directly against Tesla, which it is giving a hard time to.
Europe itself, which has automotive pioneers and flagships, currently buys around 19% of its electric cars from China and this is only the start, as major Chinese manufacturers are betting on an upcoming escalation of around 50% of their exports. For example, BYD recently announced the launch of three models exclusively for Europe.
This revolution of electric cars announces a redistribution of the cards, and very probably new conquerors.
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