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Sales of electric cars exploded on a global scale. Last year, the industry saw a 60 percent increase compared to 2021 with nearly 11 million vehicles in circulation. In other words: EVs now account for 13.2 percent of all global car sales, having tripled in the two years since 2020. Germany, Great Britain, France and China are the most important users.
This phenomenon will have a universal impact and a crucial effect on the environment, economy and geopolitics. By 2022 alone, electric and hybrid vehicles will have reduced oil consumption by around four percent. In addition, today’s electric cars are becoming more efficient and have an average range of 425 km. Progress with electric cars will continue and promise a range of up to 580 km.
Another poignant event that strengthens the appeal of EVs is the significant reduction in battery costs by more than 85 percent, which is one-third of the overall price of this type of vehicle. The hyperbolic increase in demand also logically allows for a 40 percent increase in battery production by 2022 and a 5-fold increase in numbers by 2025. This constant surge in demand for electric vehicles is one of the most well-known industry challenges in our contemporary history.
Supply chains, international competition between industry heavyweights, business balance, and interstate political relations will all be part of the new division of power as a result of China becoming a major producer of batteries worldwide.
Thanks to giants like CATL and BYD, and a national market where 1 in 4 vehicles sold are electric cars with six million sales by 20233 (double the 2021), the Chinese market is twice as big as Europe and five times as big from the US.
China’s strength lies in its domestic market and its battery manufacturing capabilities, which have allowed China to export 165 percent more vehicles abroad in November 2022 than in the same period last year. Therefore Chinese manufacturers are size contenders on a global level and a company like BYD is producing a real revolution by positioning itself directly against Tesla, which is giving it a tough time.
Europe, which has pioneer and automotive flagship brands, currently buys about 19 percent of its electric cars from China and this is just the beginning, as major Chinese manufacturers are betting on an increase of around 50 percent of their exports going forward. For example, BYD recently announced the launch of three exclusive models for Europe.
This electric car revolution heralds a card redistribution, and most likely a new conqueror.
For more information about Michel Santi, visit his website: michelsanti.fr/en
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