Report projects 43% fewer EV sales, but critic asserts rebound will be sharper than for other cars


CBD CREAM

Click Here And Get This Posted To YOU In PDF Format

In a stunning but unsurprising report, Wood-Mackenzie consultants on Wednesday forecast that global electric vehicle sales will drop 43% in 2020 as a consequence of the economic response to the spread of the novel coronavirus. But Stan Cross at the Southern Alliance for Clean Energy argues there’s no reason to believe the EV market will be hurt worse than the car market overall and adds that the EV rebound likely will outpace that for vehicles powered by internal combustion engines. 

At Wood Mackenzie, Ram Chandrasekaran and Gavin Montgomery point out that the uncertainty of the course of the pandemic and the timing of removal of the lockdown measures, make any prediction of how quickly there will be a bounceback educated guesswork at best. If their analysis is correct, global sales of 2.2 million electric vehicles last year will fall to 1.3 million this year. While the virus has caused the automakers to shut down, there’s plenty of evidence that the two biggest U.S. makers—General Motors and Ford—are not so keen on aggressive manufacturing of EVs. 

Said Cross, while acknowledging a big hurt is coming, “Unless we see automakers going back on their planned $300 billion of global EV investments over the next 5-10 years, there is little reason to think the economic crisis will hit EVs any harder than the auto industry as a whole and every reason to believe EV sales will rebound faster.” The National Automobile Dealers Association this week projected a 2020 drop in auto sales of 20-22%. 

But late last month Reuters reported that production plans it had obtained showed Ford and GM plan to keep cranking out don’t have plans to part with their money-making SUVs and pickups, even as they have promised more electric vehicles are on the way. According to production plans the news service obtained, the two Detroit-based automakers plan to build 5 million SUVs and pickups in 2026 and just 320,000 electric vehicles, 6% of total production. That’s 45,000 fewer EVs than Tesla built last year. And it contrasts with EV promises by the CEOs of both companies. GM CEO Mary Barra said last fall that the company would in the near future build a million EVs a year, with 20 models on the market by 2023. Ford proposes to have 40 EV models on the market in 2025, according to CEO Jim Hackett. That doesn’t seem to mesh with the plans Reuters scrutinized. 

In the near term, it’s not just automakers whose operations have been stymied. There is also disruption of their entire supply chain, including difficulties in acquiring essential raw battery materials, particularly lithium and cobalt. As the lockdown continues, the supply chain for many materials and outsourced parts will become more problematic.

In China, where the coronavirus emerged in December last year, the Wood Mackenzie analysts point out that overall car sales were down 21% in January this year compared with 2019. By the end of February those sales were down 80%. But for EVs, sales were down 54% in January and 90% in February. They chalk that up to the potential customers’ heebie-jeebies about both the effects of the pandemic and nervousness about buying an expensive new machine using technology with which they are neither familiar nor comfortable.

“Most new EV buyers are still first-time owners of the technology,” the Wood Mackenzie team writes. “The uncertainty and fear created by the outbreak has made consumers less inclined to adopt a new technology. Once the epidemic is contained in China, we suspect consumers will flock back to car dealers and reaffirm their confidence in EVs.” They predict the previous demand levels will return by November and in Europe by December. But in the United States, where the explosion of COVID-19 began two months after China’s, there will still be a 30% lag in EV demand over 2019, they predict.

Auto manufacturers’ thinking can be seen in GM’s decision to offer a $10,000 discount on its Chevy Bolt, an all-electric EV with a 259-mile range. That’s a quarter of its pre-COVID-19 price. In addition, longtime automakers that are just now making their first foray into the EV market have announced that models they had planned to launch in the next 12 months will be rolled out over several years. For instance, Ford’s Mustang Mach-E was launched in November 2019. But you can’t buy one until sometime in the first half of 2021. Given that automakers have suspended manufacture of vehicles and are instead making medical equipment to fight COVID-19, how long before the assembly lines start rolling again is a major unknown.

Most of the retreat in new models occurred before COVID-19 was an issue. David Ferris at E&E News reports (paywall) that automakers in the United States now have less incentive to move aggressively in EV manufacture because of White House actions. In a move that, like so many recent policy changes has sparked litigation, the Trump regime has sought to roll back stricter fuel economy standards developed during President Barack Obama’s first year in office. And before COVID-19 attacked, European and U.S. automakers had decided to slow down the introduction of new models until 2021 or later.

Nonetheless, Chandrasekaran says, “The shift towards sustainability is the driving force behind the electrification of transport. Uncertainty caused by the oil price war and global catastrophes will only serve to strengthen that resolve, not deter it.” 

While Cross agrees that the short term will be tough, he takes the view that advantages of EVs over conventional vehicles, along with state mandates to reduce greenhouse gases, will spur sales growth once the pandemic has passed. Included in the benefits, he notes, is that while EVs are more expensive to buy, their operating costs are 2.3 times cheaper to operate than gas-powered vehicles. Moreover, electric vehicles cut greenhouse gas emissions by as much as 70%. That matters since 4 out of 10 Americans—a disproportionate percentage of them poor and people of color—live in areas with unhealthy levels of air pollution, the bulk of it from auto emissions. 

While there has been resistance from cobwebbed politicians to establish policies friendly to electric vehicles, and reluctance from many car shoppers to choose an EV, a study in England found that the impacts of COVID-19, including air quality improvements from stay-at-home policies, led to 45% of respondents to say they are reconsidering their views about EV options, with 19% saying their next car would be an EV, and 26% saying they would buy one in the next five years. 

As usual with any transition, much less one whose options have been temporarily corralled by a pandemic, the move to electrified transportation will have its hiccups. With EVs only making up 2.5% of the global vehicle market in 2019, that transition has a long way to go. But in 2018, it was only 2.3%. 

Read more: feeds.dailykosmedia.com

What's Your Reaction?

Cry Cry
0
Cry
Cute Cute
0
Cute
Damn Damn
0
Damn
Dislike Dislike
0
Dislike
Like Like
0
Like
Lol Lol
0
Lol
Love Love
0
Love
Win Win
0
Win
WTF WTF
0
WTF

Comments 0

Your email address will not be published. Required fields are marked *

Report projects 43% fewer EV sales, but critic asserts rebound will be sharper than for other cars

log in

Become a part of our community!

Captcha!
Don't have an account?
sign up

reset password

Back to
log in

sign up

Join BoomBox Community

Captcha!
Back to
log in
Choose A Format
Personality quiz
Trivia quiz
Poll
Story
List
Open List
Ranked List
Meme
Video
Audio
Image