With a hyper-growth rate expected to approach 21% this year according to a Bloomberg report, the electric vehicle (EV) market represents a dynamic landscape, driving transformative shifts across numerous sectors of the automotive industry. Within this critical investment domain, focal areas such as infrastructure, technological advancements, global market dynamics, and regulatory influences converge to form a complex tapestry, offering both opportunities and inherent challenges.
To help you navigate this rapidly changing category, Guidepoint Insights has curated a variety of high-quality content designed to keep you ahead of the curve.
Trade Barriers
The EV industry is deeply affected by a complex web of regulations, tariffs, trade agreements, and geopolitical tensions. At a recent highly-attended conference, Guidepoint Insights collaborated with a former senior manager from SK Innovation’s battery division and former CEO of ZoZo Go to deeply explore the intricacies of these trade barriers and their widespread impact.
Key takeaways:
“Global brands now account for almost 70% of vehicle sales in the United States – that’s non-US brands. If you add up Tesla plus Ford plus GM, they’re right around 30%.”
“The Pentagon procurement ban and the ongoing IRA, Inflation Reduction Act, are likely to have minimal impact on the Chinese battery makers.”
“South Korean makers could leverage this potential shift away from Chinese makers to make further inroads with the US or even the European automakers based in the US.”
“The US does not have sufficient manufacturing capabilities from upstream to downstream, and the US is not able to produce in mass quantities for millions of vehicles.”
“China probably will still be a key supplier basis.”
Global EV Supply Chain
The global EV supply chain represents a critical component in the ongoing evolution of electric mobility, especially in the context of domestic substitution and China’s efforts to close the technological gap with foreign manufacturers. Addressing this pivotal topic, Guidepoint Insights delved into key inquiries with a Partner and Co-Founder from Automobility during a prominent discussion, shedding light on the current dynamics and prospects of EV supply chains.
Key Takeaways:
“The possibility is that the low-priced EVs may enter the US market because even with these tariffs, if they can do it at around $20,000, they can make profits because most of the market in the US is driven by Tesla, is in that $25,000-40,000 market including the established brands.”
“The automotive chip industry is highly divisive, divided, or highly concentrated. If the demand changes, each country or each consortium or alliance is building its own chip strategy and it’s also easy for delinking and disconnection to occur.”
“The integrated supply chain model where the OEMs and captive Tier 1 suppliers or these integrated suppliers are collaborating in the early stages of the product development so they can help the forecasting demand more accurately and align the production schedules.”
“Entity list additions can happen not at the midstream or downstream level, but in terms of the upstream. Those will all come under the multilateral controls. It could be they have these multilateral regimes like the Wassenaar Arrangement.”
EV Batteries
The advancement of EV batteries is pivotal in shaping the future of electric mobility. Guidepoint Insights addressed key questions from one of its highly anticipated teleconferences with a renowned cell battery expert in China.
Key takeaways:
“Chinese engineers are good at developing super longer LFP cell batteries, more than 10,000 cycle lives for the ESS usage.”
“In the future, with the development of the NCM cell battery system, the energy density may increase to about 300 W/kg. This will be a very big challenge for Korean makers.”
“Sodium-ion batteries will account about 5% of the total lithium-ion batteries’ market. The total demand for the lithium and cobalt and nickel will not drop dramatically in the next two or three years.”
“In the future, the supply chain will become localized due to the IRA policies. Not just for batteries, but also for raw material, and even raw material mining procedures.”
EVs in China
As the world’s largest automotive market, China will continue to play a key role in the electric mobility sector, fueling innovation, driving mass adoption, and reshaping the global EV landscape. Looking ahead to 2024, what can we anticipate for major Chinese EV manufacturers operating within this dynamic landscape? Guidepoint Insights recently engaged in a discussion with a senior management from China’s leading EV manufacturer, shedding light on his perspectives and providing valuable insights:
Key takeaways:
“For companies like Xpeng, probably they will just export their vehicles, for example, to Europe. They will not set up a base in Europe. They just leverage the dealership system in Europe to sell their products.”
“Moving forward, if the Chinese OEMs are going to or they have a very big ambition to compete with the global giants, they have to build up their vehicle production bases abroad and even the battery production bases abroad.”
“The major trends in the EV market will be the price war, the technology war and also the brand war.”
“A lot of companies are trying to adjust their pricing strategies, initially looking to mirror Tesla’s approach. However, the reality suggests that when their brand awareness is not as strong as Tesla, they have to lower their price.”
Through ongoing pivotal discussions with renowned industry experts in major markets, Guidepoint Insights will continue to follow the EV market development, outline critical advancements in the technology fields and their potential impacts on the industry. Learn more about the latest Guidepoint Insights information from: https://www.guidepoint.com/what-we-offer/guidepoint-insights/.