What will happen to electric cars?

What can electric mobility go when the crisis goes away?

One of the many questions that arise in the current pandemic situation is what will happen to electric mobility. It shuffles the cards a lot in this game and the situation changes every day.

At first glance, everything seems clear - in the context of massive "burning money" and a long period of closing enterprises, accompanied by ultra-low consumption, which will certainly be accompanied by a long stagnation in the market, most of the financial reserves accumulated by companies will decrease, and with them investment intentions will change . These investment intentions are largely related to electric mobility, which is currently still quite young.

Everything seemed clear ...

Before the pandemic, everything seemed quite clear - companies were taking a different approach to building electric vehicles, but in any case, in recent years, no one underestimated the prospects for electric mobility. Anything that sounds like “green” or “blue” has become the basis of marketing, and investments in this direction have burdened the maximum development budget of companies. After the diesel gate crisis, Volkswagen made a very strong turn towards electric mobility by investing a lot of money in the development of new MEB and PPE platforms specifically designed for electric vehicles with all the features of this type of drive. There was no way back. Many Chinese companies have taken the same approach as the opportunity to take positions in foreign markets that they have never been able to enter, primarily due to the low technological level and low quality of their products. GM and Hyundai/Kia have also created "electric" platforms,

and Ford has partnered with VW. Daimler is still producing EVs on a universal basis, but the preparation of a platform for electrified models is also almost complete. The approach of companies such as PSA / Opel and BMW is different, whose new platform solutions are aimed at flexibility, that is, the ability to integrate all drives, including plug-ins and fully powered systems. On the third hand, there are options, such as the Renault-Nissan-Mitsubishi CMF-EV platform or Toyota's e-TNGA, which are so far away from the original CMF and TNGA-naming conventional vehicle platforms that can be seen as completely new electric platforms.

From this point of view, most of the work was done before the crisis. VW's Zwickau plant, which is supposed to produce only electric vehicles, is practically equipped and ready to go, and companies that build electric vehicles on standard platforms have already adapted production. Most of them design and manufacture their own electric motors and batteries. However, we must point out that by batteries in this case we mean peripheral systems such as enclosures, power electronics, cooling and heating. The "chemical core" of lithium-ion batteries is carried out by several large companies such as China's CATL, Japan's Sanyo/Panasonic, and Korea's LG Chem and Samsung. Both with them and batteries, production problems arose even before the closure of car factories and were related to supply chains - from the raw materials needed by cell manufacturers to the cells themselves that must reach car companies.

Paradigms

However, supply problems and closed plants only paint the current picture. The question of how electric mobility will develop depends on the horizon after the crisis. It is not yet clear which part of the EU rescue packages will go to the automotive industry, and this makes sense. In the previous crisis (since 2009), 7,56 billion euros went to the automotive industry in the form of loans for restoration. The crisis itself has forced manufacturers to invest in new production technologies so that they are much better prepared for such situations. Car manufacturing has now become much more flexible and easier to adapt to fluctuations in demand, and this includes more flexible options for stopping and starting production. Which does not mean that the latter is easy. One way or another, companies are currently preparing plans A, B and C for work, depending on how events develop. America believes that lowering the limit on fuel consumption (which in Europe is limited by carbon dioxide emissions) can lead to an increase in oil consumption, because current low prices are not suitable for oil producers, most of which are extracted from shale and are therefore quite expensive. However, low oil prices and the abolition of exemptions are hitting the still fragile electric mobility, whose financial viability is largely based on subsidies. Therefore, it is important how these subsidies will be reformatted, which has made them increasingly attractive for purchases in countries such as Norway and, more recently, Germany. They must come from tax revenues in countries, and they are sharply reduced, while social costs are rising. If the crisis lasts long, will countries be ready to subsidize electric cars and companies for active development? The latter also applies to internal combustion engines.

The other side of the coin

However, there may be a completely different view of things. Much of the money that the European Union and the United States (for GM and Chrysler) spent on car companies during the 2009 financial crisis had to be invested in green technology. For European manufacturers, however, this materializes under more investment in "clean" diesels, and then in downsizing gasoline engines. The former were compromised in 2015, and with the introduction of an increasingly stringent reduction in carbon dioxide emissions requirements, electric vehicles came to the fore. Companies like Tesla have become literally strategic. 

According to the founders of the green philosophy, it is the current crisis that shows how much pollution from machines harms the planet, and this is a serious trump card in this direction. On the other hand, everything requires funds, and manufacturers could soon request a review of the conditions for imposing fines for high emissions. The conditions of formative circumstances could be a strong argument in this direction, and as we said, low oil prices further complicate the economic aspect of electric mobility - including investments in renewable sources and a charging network. Let's not forget in the equation the manufacturers of lithium-ion cells, who are investing billions in new factories and who are also "burning money" at the moment. Can another decision be taken after the crisis – to target the stimulus packages to an even greater extent to clean electric technologies? It remains to be seen. 

In the meantime, we will publish a series in which we will tell you about the challenges of electric mobility, including production methods, technologies for electric motors and batteries.