Having just spent a week at the EMO Hannover 2023 exhibition it was interesting to hear all the diverse opinions on the two most topical subjects in our industry and the world at the moment: Sustainability and EVs (Electric Vehicles). I say our industry because metalworking has an ‘intrusive’ influence on our lives every day, a fact which many out of our industry do not recognise. The two subjects are definitely connected and in many first world countries the politicians are striving to legislate adherence to their recommendations in the shortest possible period.
The proposed European Union ban on internal combustion engines is being denounced by ministers in governments as job-destroying “madness” that would benefit China, while a lawmaker has labelled supporters of tightened vehicle pollution limits the “gravediggers of the automotive industry in Europe” and “a transition to unemployment and inflation without end.”
While attending most of the press conferences that were held at EMO Hannover 2023 – arranged by machine, tooling and accessory manufacturers from around the world, as well as those given by the associations representing the manufacturers of these products in the individual countries – it was clear that most believe that there needs to be change to ‘save the world’. All want to be responsible companies and entities. But there is a wave of populist resistance to EVs and climate policies as voters feel the pinch of rising prices and push backs are being openly spoken about.
There are now many, not just a number of, news reports lately where the writer talks about the growing push back against EVs. A part of this is expected as a much larger share of EVs would mean a lower share for petrol and diesel vehicles. However, there are other factors that are shaping the narrative as well, such as political divisions and protecting the jobs in ICE (internal combustion engine) vehicle manufacturing.
It is a known fact that Chinese electric vehicle makers, including BYD Co. and Nio Inc, are making a push into Europe to sidestep a price war at home. Their arrival is an unwelcome development for European car manufacturers that were slower than their Chinese peers to embrace electrification and are struggling to catch up. Some potential help arrived recently, when the European Commission kicked off an investigation into the subsidies doled out by China’s government to its EV industry, saying the support was distorting the market. While the probe may help Europe’s homegrown manufacturers to defend their turf, it may also spur Beijing to retaliate, harming their business in China.
Chinese brands account for about half of all EVs sold globally, according to HSBC analysts, and they grabbed more than half of their domestic car market for the first time in July 2023. There is also talk that there are hectares of EVs that are just sitting and not moving. But the reality is they are struggling to generate consistent profits and are locked in a price war as China’s economic growth slows. Selling in Europe, where they can command higher prices, will require big initial investments but may eventually produce big returns. With the EU planning to gradually phase out combustion engines, the market is potentially huge. UBS AG analysts have warned that western automakers are set to lose a fifth of their market share because of the rise of more affordable Chinese EVs.
There are also broader criticisms of electric vehicles with for example, the risks posed by battery fires and minerals mining as elements of the “electric car con” being cited.
No matter what is said, as everybody tries to grab a slice, going forward there is going to be pressure from both sides. But, personally, I can’t imagine trying to drive a vehicle manufactured in recyclable plastics? It is not going to happen.
