Are we too optimistic about the future of electric cars?

The famous country singer once sang a song, “When you dress up and find yourself aimless, time slows down.” “If the masses or other German giants had heard the song, I’d be more nervous. After all, the high-tech electric cars they’ve spent tens of billions of dollars developing are not only not overtaking Tesla, they may face a future of unchallenged fate.

Of Europe’s traditional giants, there is no greater interest in electric cars than the masses. They plan to increase sales of electric vehicles (BEVs) to a quarter of their global total selling by 2025 and to 40% by 2030. Mercedes-Benz and BMW, while not as aggressive as Volkswagen, also have their own plans for pure electric vehicles. Unfortunately, experts predict that they may overestimate the true market performance of electric cars, which don’t score too much cake.

IHS Markit believes that the market share of all-electric vehicles will be 10.2% by 2025 and 14.8% by 2030. LMC Automotive predicts that the share of all-electric vehicles will climb to only 9% in 2025 and accelerate to 17% by 2030. Ultima Media gives 7.5% and 15% of the market share for both points in time, while Fitch Solutions Macro Research is more pessimistic, with a 7.3% share of all electric vehicles in 2028, and this is limited to the European market.

Clearly, market research institutions are not as optimistic as manufacturers. However, in this case manufacturers still choose to follow, France’s PSA Group, Renault and Ford Europe have their own plans for pure electric vehicles.

Small fuel cars will become more expensive in the future

For the giants, just because the government’s environmental regulations forced to “fatten” the market before the rush to kill, may put themselves in a dead end. After all, there are a lot of low-income Europeans who rely on cheap entry-level fuel cars to get around, and they won’t be able to afford expensive electric cars. Once sales are dismal, so many electric vehicles will face the fate of discount sales, when the manufacturers are afraid to pay a lot of “tuition.” And don’t forget, one of the big reasons for developing electric cars is that they can’t go on sale if they don’t sell electric cars.

Behind these manufacturers are the European Union, which requires cars and SUVs to reduce fuel consumption to 57.4 miles per gallon in 2020 and 2021, respectively. By 2030, the EU’s fuel economy requirements will be further raised to 92 mph (about 2.56 liters per 100 km). This fuel consumption also means that most vehicles on the market will have to be purely electric by 2030.

According to Evercore ISI, an investment research firm, the profit risk of the European car industry if it fails to meet increasingly stringent emissions policies could be spreeuped to 33 billion euros ($37 billion) by fines, about half of which will be spent on compliance.

Earlier this year VW said small cars like Up and Polo would be too expensive to produce by 2030. Up will then increase by at least 3,500 euros and sell it directly to 145,000 euros, while the slightly more expensive Polo will increase by 4,000 euros. What’s more, this argument applies to all cars.

Are we too optimistic about the future of electric cars?

Other European manufacturers are not slow to become more electric

Doing so would be good for the environment, but it could create a more dire political crisis for the EU. Because people will realize that they can only take the bus to work, and in order to save the earth in the name of being forced to change their way of life will probably be most people’s scolding.

Bernstein Research analyst Max Warburton believes there may be some signs in the market, but he is not convinced that electric cars will be unified.

“Manufacturers are under so much regulatory pressure that they have to sell more electric cars in Europe. As subsequent emissions regulations continue to tighten, the challenges they face will be even greater. The problem, however, is that electric cars are not the first choice for most users because they are not only expensive, but also have poor infrastructure. Do end users have to cut meat and give up their fuel cars? Is this a pessimistic view? Warburton said.

The power of policy has always been so powerful that if the EU bans diesel cars into the city centre, users will not have to switch to electric cars, and next year’s new electric model will provide users with more attractive options. Of course, the lack of charging facilities is a problem to be solved, and the poor residuals of electric cars being resold are a headache for many, not to mention the extremely expensive price of battery exchanges.

Are we too optimistic about the future of electric cars?

BMW i4 Electric Concept Car

“In 2019, second-hand residuals from models like the Renault Zoe, Nissan And BMW i3 have risen, but don’t be happy too early, they’re just going from worthless to being able to sell melons, and the actual residual value is still very ugly.” But that’s a good sign, at least that it’s proof that more people are buying electric cars now. Warburton said.

Ferdinand Dudenhoeffer, a professor at the German Centre for Automotive Research (CAR), believes VW will certainly achieve its goals. “ID.3 looks great, with a price of 24,000 euros similar to the Golf, and more models will be born on this platform in the future. Dudenhoeffer said.

BY 2022, VW SAYS IT WILL LAUNCH 27 ELECTRIC MODELS BASED ON ID.3, BOTH ON VW’S LABELS AND OWNED BY SIAAT, SKODA AND AUDI.

“There are problems with predictions like IHS Market. They were wrong in the past, and now they are underestimating the electric car market. In the next 5-10 years, Volkswagen has a good chance of becoming a true leader in the auto industry, and electric cars are critical to them. Dudenhoeffer explains.

Are we too optimistic about the future of electric cars?

Volkswagen Electric Concept Car at the Los Angeles Auto Show

Dudenhoeffer also feels that battery prices will drop low enough for small electric cars to make a profit.

Professor Stefan Bratzel, head of the German Automotive Management Centre, is not fully confident, although he agrees that these market research institutions are giving too conservative forecasts, particularly in 2030.

“Can VW win 25% of the market by 2025?” It’s probably not easy to do that, but the odds of 15-20% are high. As for charging networks, it’s more likely that they will mature in 2030. Bratzel said.

Bratzel points out that the Greens have been pushing for an increase in the carbon tax, so the petrol tax is likely to rise, and subsidies for diesel are likely to shrink next year, which is also driving the electric car into the market for a cake.

“Despite the tens of billions of dollars being spent, the development, production and sale of electric vehicles is likely to remain difficult to mainstream, so traditional internal combustion engines will continue to refine over the next decade to meet tightening emissions regulations.” It also means that manufacturers still have to pay fines, profits are falling, whether to continue to invest in energy-saving and emission-reduction technology will have to be a question mark. Daniel Harrison, an analyst at Ultima Media, explains.

According to Ultima Media, 40 percent of the world’s cars and SUVs will still have internal combustion engines by 2030, which will make many lawmakers quite angry.

Bernstein Research’s Warburton remains convinced that at some point in the future, user demand for electric cars will suddenly ignite, saving vulnerable manufacturers.

“Interest in electric cars has really increased in recent years, as can be seen from Google search data and everyone’s daily chats. While the uncertainty surrounding demand for electric vehicles remains high, good signs are still emerging in the market. If enough users were willing to buy electric cars (at a high price), the industry’s profits would not be squeezed into a sheet of paper. Warburton said.

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