mobility - What We're Reading - StockBuz2024-03-29T15:10:20Zhttp://stockbuz.ning.com/articles/feed/tag/mobilityGrowth in the global electric-vehicle markethttp://stockbuz.ning.com/articles/growth-in-the-global-electric-vehicle-market2017-07-06T21:55:06.000Z2017-07-06T21:55:06.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p class="article-description"><em>With the recent announcement from <a href="https://www.wsj.com/articles/volvo-to-phase-out-conventional-car-engine-1499227202" target="_blank">Volvo</a> that all vehicles will have electric engines in 2019 and phase out combustion engines, it becomes shockingly clear that electric is growing.................and faster than we have previously believed. Clearly Tesla (TSLA) has more competition than ever before so I bring you this piece from <a href="https://www.wsj.com/articles/volvo-to-phase-out-conventional-car-engine-1499227202" target="_blank">McKinsey</a> to give you the breakdown. By the way, what does this mean for crude oil?  Just tossng it out there.</em></p>
<p class="article-description">New research on electric mobility reveals Chinese OEMs produced 43 percent of EVs worldwide in 2016 and highlights other trends in supply and demand.</p>
<p><strong>China has increased</strong> its lead in electric-vehicle (EV) production, according to new McKinsey research (Exhibit 1). Chinese OEMs produced 43 percent of the 873,000 EVs built worldwide in 2016. And the country now has the largest fleet of EVs on the road, overtaking the US market for the first time (see sidebar, “Our methodology”).</p>
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<div class="eyebrow">Exhibit 1</div>
<div class="infographic"><img src="http://www.mckinsey.com/%7E/media/McKinsey/Industries/Automotive%20and%20Assembly/Our%20Insights/Dynamics%20in%20the%20global%20electric%20vehicle%20market/SVGZ_Global_electric_vehicle_market_china_ex1.ashx" id="main_0_ctl21_imgExhibitGraphic" class=" svg" alt="Electric Vehicle Index, ranking 10 countries based on market and industry performance" data-fallback="/~/media/McKinsey/Industries/Automotive and Assembly/Our Insights/Dynamics in the global electric vehicle market/PNG_Global_electric_vehicle_market_china_ex1.ashx" name="main_0_ctl21_imgExhibitGraphic" /></div>
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<h2>China extends EV industry leadership</h2>
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<p>Since 2010, we have measured the overall “maturity” of various countries with regard to the supply of and demand for electric vehicles (EVs). In our Electric Vehicle Index, we use two equally weighted dimensions: the demand for and use of EVs, and, from the industry (supply) side, the economic significance of the value created via electric vehicles.</p>
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<li><em>Demand</em> indicators analyze the share EVs have of an overall market. They also look at incentives, such as subsidies, the existing infrastructure, and the range of EVs available.</li>
<li><em>Supply</em> indicators determine how successful the respective automotive sector is in each country regarding electric mobility. This involves analyzing factors such as current and projected shares of the global production of EVs; it also incorporates key components such as e-motors and batteries.</li>
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<p>This year, we examined 15 markets: China, Denmark, Germany, France, Italy, Japan, the Netherlands, Norway, Portugal, Sweden, Switzerland, Spain, South Korea, the United Kingdom, and the United States. This selection was based on four criteria: sales volume, production volume, vehicle fleet, and the country’s anticipated role as an EV leader.</p>
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<p>China extended its industry leadership by making gains across all dimensions of the supply side of EVs, including current and projected production of EVs and their components, such as lithium-ion battery cells and electric motors. One important factor is that the Chinese government provides subsidies to the sector in an effort to reduce fuel imports, improve air quality, and foster local champions. Whereas Chinese OEMs accounted for 40 percent of EV production in 2015, this increased to 43 percent in 2016. Leading Chinese EV manufacturers all ranked among the top ten global EV producers in 2016. Given the <a href="http://www.mckinsey.com/industries/automotive-and-assembly/our-insights/a-road-map-to-the-future-for-the-auto-industry">rapid increase in production capacity</a> by domestic suppliers, China’s lithium-ion battery-cell players increased their global supply share, reaching about 25 percent in 2016. This is mainly at the expense of Japanese companies, which lost significant market share year on year—though they still accounted for the greatest share in 2016, with around 48 percent. South Korean suppliers expanded their position and now hold 27 percent of the light-vehicle battery-cell market.</p>
<p>Overall, Germany and the United States also perform well in the industry, with no major changes in EV production share (23 percent and 17 percent, respectively). However, these countries saw slight losses with respect to electric-motor production due to China’s expansion.</p>
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<h2>China’s domestic EV demand grows, while Europe stagnates</h2>
<p>In addition to its leading role in EV supply, <a href="http://www.mckinsey.com/industries/automotive-and-assembly/our-insights/finding-the-fast-lane-emerging-trends-in-chinas-auto-market">the market for EVs in China</a> held steady in 2016. For the first time, China has overtaken the US market in the total number of EVs on the road. Cumulative EV sales reached 650,000 units in 2016, and the country increased new registrations for EVs by 70 percent year on year, to around 350,000 units (Exhibit 2). In comparison, Europe saw a sales increase of only 7 percent during the same period, after doubling them the prior year. The stagnation of the European market largely stems from a big drop in new registrations in the Netherlands, attributable to changes in the incentive scheme for plug-in hybrid vehicles. In the United States, EV sales were at 160,000 in 2016, a 37 percent increase.</p>
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<div class="eyebrow">Exhibit 2</div>
<div class="infographic"><img src="http://www.mckinsey.com/%7E/media/McKinsey/Industries/Automotive%20and%20Assembly/Our%20Insights/Dynamics%20in%20the%20global%20electric%20vehicle%20market/SVGZ_Global_electric_vehicle_market_china_ex2.ashx" id="main_0_ctl24_imgExhibitGraphic" class=" svg" alt="growth in electric vehicles in China, Europe, and United States for 2014-16" data-fallback="/~/media/McKinsey/Industries/Automotive and Assembly/Our Insights/Dynamics in the global electric vehicle market/PNG_Global_electric_vehicle_market_china_ex2.ashx" name="main_0_ctl24_imgExhibitGraphic" /></div>
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<p>The sales dynamic in China has been supported by a launch of many new EV models. Roughly 25 new EV models were introduced to the market in 2016. Overall, Chinese customers can now choose from around 75 EV models—the most of any market.</p>
<p>While China outperforms in absolute terms, the country does less well if considered in relative terms: in 2016, EV penetration in the overall light-vehicle market was only 1.4 percent. Norway outperforms here; about one in four cars sold in the country in 2016 was electric. Generous incentives are provided to EV customers in Norway, making EVs more affordable than cars with internal combustion engines. The Netherlands also has relatively high penetration, with an EV share of 5 percent, though sales decreased in 2016 (falling by 48 percent year on year). Sales dropped in 2016 after the country announced it would increase the company car tax for plug-in hybrids. Most other markets still do not exceed the 2 percent threshold. Japan was also affected by very low sales in the second half of 2016. These examples show that <a href="http://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/an-integrated-perspective-on-the-future-of-mobility">e-mobility development</a> varies significantly by country.</p>
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