Electric Vehicles Set to Soar Leading up to 2030
Electric vehicles are forecast to skyrocket in popularity over the next decade and have already been making great strides recently despite the economic uncertainties. Deloitte reports that across Europe, countries such as Norway lead the way with EVs commanding a 56 per cent market share, and two of the top ten cars sold in the Netherlands in 2019 were electric battery operated.
In the United Kingdom, although electric vehicles are still an anomaly and the country lags behind several other regions, from a small starting point, it has seen triple-digit growth in recent years. Now, after the announcement of a “Green Industrial Revolution” earlier in November by Prime Minister Boris Johnson, there is a 10-point plan in place to ensure the UK ‘forge ahead’ with eradicating its emissions and achieving net-zero carbon emissions by 2050, particularly crucial in the run-up to the COP26 climate summit in Glasgow next year.
PM Johnson said: “My Ten Point Plan will create, support and protect hundreds of thousands of green jobs, whilst making strides towards net-zero by 2050. Our green industrial revolution will be powered by the wind turbines of Scotland and the North East, propelled by the electric vehicles made in the Midlands and advanced by the latest technologies developed.”
The Inflexion point for Industry
Such high-level government support is visible not only across Europe but the world. Famously, the American energy company Tesla were close to bankruptcy in the 2008 crash but received £500 million of US Government support. Now, it is the most valuable car manufacturer in the world with its founder Elon Musk recently overtaking Bill Gates as the second richest man in the world. It seems nothing can stop electric vehicles over the next decade.
- New petrol and diesel car purchases will be banned from 2030 in the UK
- Tesla has so far delivered 500,000 EVs this year
- Countries set to follow Norway, where EVs has 56 market share
Even in areas with particularly high carbon emissions, such as China, there is a sea-change and an awakening to the responsibility we have as a society to protect the environment. President Xi Xingping recently announced at a UN summit that China would be carbon neutral by 2060, and the country is supporting the growth of the electric vehicle industry in a massive way. EV manufacturers such as Nio, Xpeng and Li auto cars are consistently growing their productions and market capitalisation, with Nio the foremost in that regard- they are preparing to enter the European market in 2021. Over in the US, newer younger companies are hoping to someday rival Tesla; Fisker is one such company.
With the technology proliferating and the cost and difficulties slowly reducing, as a result, expect to see more public transport powered by electric vehicles and hydrogen fuel cell technology. Countries such as Austria and Germany have already purchased such entities. DHL recently bought an electric truck for last-mile deliveries in London too, but over the next decade do not be surprised to see electric cars, trucks, buses and trains become less of a gimmick and more of a crucial pillar in the fight to save the environment and halt destructive climate change.
IMF: Variants Can Still Hurt Manufacturing Recovery
After a year of on-and-off manufacturing in the US, UK, and the eurozone, demand for goods surged early last week. Factories set growth records in April and May, suppliers started to recover, and US crude hit its highest price point since pre-COVID. As vaccination efforts immunise much of the US and UK populations, manufacturers are now able to fully ramp up their supply chains. In fact, GDP growth could approach double-digits by 2022.
Now, the ISM productivity measure has surpassed the 50-point mark that separates industry expansion from contraction. Since U.S. president Biden passed his US$1.9tn stimulus package and the UK purchasing managers index (PMI) increased to 65.6, both sides of the Atlantic are facing a much-welcomed manufacturing recovery.
Lingering Concerns Over COVID
Even as Spain, France, Italy, and Germany race to catch up, and mining companies pushed the FTSE 100 index of list shares to a monthly high of 7,129, some say that UK and US markets still suffer from a lack of confidence in raw material supplies. Yes, the Dow Jones has made up its 19,173-point crash of March 2020, and MSCI’s global stock index is at an all-time high.
Yet manufacturers around the world realise that these wins will be short-lived until pandemic supply chain bottlenecks are solved. If we keep the status quo, consumers will pay the price. In April, inflation in Germany reached 2.4%, and across the EU’s 19 member countries, overall prices have increased at an unusual pace. Some ask: Is this true recovery?
IMF: Current Boom Could Falter
Even as Elon Musk tweeted about chip shortages forcing Tesla to raise its prices, UK mining demand skyrocketed; housing markets lifted; and the pound sterling gained value. The International Monetary Fund (IMF), however, cautioned that manufacturing recovery won’t last long if COVID mutates into forms our vaccinations can’t touch. Kristalina Georgieva, Washington’s IMF director, noted that fewer than 1% of African citizens have been vaccinated: “Worldwide access to vaccines offers the best hope for stopping the coronavirus pandemic, saving lives, and securing a broad-based economic recovery”.
Across the globe, manufacturing companies are keeping a watchful eye on new developments in the spread of COVID. Though US FDA officials don’t think we’ll have to “start at square one” with new vaccines, the March 2021 World Economic Outlook states that “high uncertainty” surrounds the projected 6% global growth. Continued manufacturing success will in large part depend on “the path of the pandemic, the effectiveness of policy support, and the evolution of financial conditions”.
Mathias Cormann, secretary-general of the Organisation for Economic Co-Operation and Development (OECD) concurred—without global immunisation, the estimated economic boom expected by 2025 could go kaput. “We need to...pursue an all-out effort to reach the entire world population”, Australia’s finance minister added. US$50bn to end COVID across the world, they imply, is a small investment to restart our economies.