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The Race for EVs

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Electromobility: The Big Leap has Yet to Come

April 14th 2017

Electric car Israel

The annual Electromobility Index from consultancy Roland Berger and the fka automotive technology research institute (Aachen, Germany) certifies Germany and France the leading positions in terms of technology. Though the market shows growth in all regions, the market share for electric vehicles is still very low.

The Electromobility Index periodically compares the competitive positions of the seven most important automotive geographies China, France, Germany Italy, Japan South Korea and USA in terms of technology, industrialization and market.

According to the study, Germany currently holds the technology pole position in the race about electromobility – a little bit surprising, given the success of Tesla in the US and the relatively high market penetration of electric vehicles in France. Wolfgang Bernhardt, Roland Berger Partner and expert for automobile markets, explains why.

“Germany’s jump to the leading position is owed to the increased product supply and the extended battery capacity.” The product spectrum in partly and full-electric vehicles has been “significantly expanded”, he added. The product portfolio of the French OEMs is smaller and covers the market for cost-affordable compact cars in the first place. For this reason, the French EV vendors are second to none with regards to price-performance ratio.

“The study shows that all geographies are working intensively on the electrification of the automobile, however their respective focuses are different”, commented Alexander Busse, Consultant for fka. The price reductions for lithium ion batteries and the introduction of new cell generations enables carmakers to complement their product range with models that have a higher driving range.

The experts anticipate that regulatory interventions in metropolitan areas to reduce exhaust emissions will give a strong impulse to establish electromobility in the international markets. In cities like London, Paris or Mexico City, gasoline and even more so diesel engine will likely be banned. In addition, China has announced a legislative measure to establish a quota system for electric vehicles. Norway is discussing a complete ban on combustion engines from 2025.

A problem for car manufacturers is the dependence of the battery technology on certain raw materials (such as lithium, nickel, manganese, cobalt and graphite) and their supply countries. For example, 95% of the reserves of natural graphite are in China and almost 50% of the world’s demand on cobalt is served by the Congo. Lithium is extracted mostly in Chile and Australia; two thirds of the world’s supply come from these two countries.

The supply of raw material and the production of battery cells therefore are factors that underlie certain political risks. For instance, the electromobility market in China is served to more than 90% by lithium-ion batteries from local production. For this reason, Chinese manufacturers are ranking high in the study, including their share of the global cell production. As a consequence, China holds the top spot in industrialization, ahead of the US and Japan.

In China, sales of electric vehicles have more than doubled over the past year. Therefore, the country has jumped to the second spot in the market category – behind France where the market share of electric vehicles continues to be higher than in China. Also the growth in France is high at 50% per year (in Germany it is the same, the study says).

Under the bottom line however, the market share of hybrid and battery electric vehicles exceeded only in France and China the 1% mark – still a rather unsatisfying percentage, finds Roland Berger expert Thomas Schlick. To meet the fleet emission limits that will be applied across Europe from 2021 onwards, this market share needs to be significantly increased. To increase the customer acceptance, the consultancy suggests that OEMs now put the emphasis on better comfort when charging by reducing charging time. “To this end, we need full coverage for the fast-charging infrastructure”, Schlick said.


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