By: Nicholas Yiu, Addionics' Senior Battery Scientist
Photo credit: Wix
The automotive world has been starved due to Covid-19, which caused demand to plummet and production to halt for all major battery electric vehicles (EV) manufacturers. UK car sales slumped by 97%, global EV sales plunged by 43%, and major OEMs have suspended operations temporarily. Analysts predicted 2020s to be the decade for EV growth, but this shockwave has made for a poor start. However, we are optimistic the market will slingshot back into action and come back stronger with strengthened demand when the pandemic is over.
Today, there is huge economic uncertainty as noted by Rupert Mitchell, chief strategy officer at WM Motor:
“The health emergency is being replaced in China to a certain extent with economic uncertainty. As people feel concerned about their incomes, their businesses, major discretionary purchases like buying a new car will no doubt be impacted.”
Source: Wood Mackenzie
While uncertainty looms over the automotive industry, countries try their best to continue their push for sustainability and technology development. Local governments in China have announced a 2.7b yuan stimulus package for automobiles, new electric cars, and charging infrastructure.
We are also optimistic to see positive movement in the UK and Europe, with automakers investing in factories to accelerate electrification, and automakers in the US including General Motors promising new EVs by 2023.
Source: Roland Zenn
There is also a global push to support green-stimulus bills: the recovery from the Covid-19 economic crisis coincides with the fight against climate change and targeted low-carbon programs could restart growth and hiring while ushering in a more environmentally sustainable “next normal.”
As the world recovers and consumer confidence bounces back, government, commercial, and consumer purchases are expected to drive the EV market back up and OEMs need to be prepared to meet the demand wave. Demand for high-performing electric cars will rise again and we will observe a divide between OEMs who can innovate in times of low demand and high uncertainty will ultimately come out on top.
The realities of a post Covid-19 economy suggest OEMs need to show much improved performance and lower costs best matched with consumer demand in order to rebound to match the demand for the battery EVs. Specifically, we believe OEMs that can deliver better performance including battery energy density, charging time, lifetime, safety, range, while lowering costs will gain the upper hand. Battery energy storage solutions with lower costs for the buyer, lower energy spend, better performance and safety than today’s automobiles will be important. Innovation and investments in the battery chemistry/physics, BMS systems, manufacturing processes, and electric powertrains will be particularly highlighted in new customer demand, and OEMs with a roadmap to tackle some of these points will be more attractive for future EV buyers and investors. Furthermore, strong investments in battery technology will bring socio-economic benefits along with supporting decarbonization efforts. The time is now for firms to innovate their business models and technology to help countries recover from the Covid-19 economic crisis and secure their position as the future of battery EVs.
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