Car demand will collapse as people move to cities. $100 billion was written off the stock value of car companies recently. The US economy is on a sugar rush from a trillion-dollar borrowing boost at the top of the cycle. Climate change getting out of control in 12 years? These and many other negative indicators can portend a recession, maybe a severe one. What are the implications for EVs?
Dr Peter Harrop, Chairman of IDTechEx advises, "It is highly likely that at least one major car company will collapse even without a recession. Car sales could peak earlier than our current forecasts of ten years or so and impact even electric car sales. No one will rescue a major just because it is promising to invest $10 billion in pure electric cars. At minimum, it will need to have strong EV sales of something: notably alternatives to the leading Nissan/ Renault, Tesla or Chinese pure electric cars selling so well. Better still they should be active in the EV markets that have more secure growth. They include unmanned mines to trucks, driverless city pods, boats, mobility for the disabled, silent air taxis allowed to fly all hours, regional airliners and even solar drones up for five years. Investors may shun EV makers and their suppliers where they are excessively exposed to cars, though a collapse in electric car sales (as opposed to overall car sales) within ten years is not likely without a massive recession."
Sensitive to this, IDTechEx forecasts EVs in over 55 categories embracing the many more profitable, less vulnerable sectors. For example, a new IDTechEx report covers, Electric Motors for Electric Vehicles: Land, Water, Air 2019-2029. The percentage of cost of an EV that is battery will drop in a few years but the number of traction motors + controls per vehicle is increasing.
Harrop adds, "Yes, shops already collapse in the face of internet shopping but that creates strong demand for pure electric delivery trucks. Yes, the Chinese control the demand and supply of over 90% of regular electric buses in the world but electrifying North American school buses just to reduce costs will create a yearly $4 billion new EV market in a few years."
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