over 2 years ago • 3 mins
A new study showed that electric vehicles (EVs) will outsell traditional cars five years earlier than expected – whether carmakers should choose to accept it or not.
What does this mean?
According to Ernst & Young (EY), the combined sales of EVs across the world’s three biggest car markets – Europe, China, and the US – will outpace gas-powered cars by 2033. Individually, though, they’ll hit that tipping point at different times: Europe in 2028, China five years later, and the US coming up the rear in 2036.
The milestone – dubbed “global EV supremacy” – is five years earlier than EY had previously predicted, which probably has something to do with more interest from drivers, as well as governments’ increasingly anti-emission stances. And the surprises didn’t stop there: EY said non-EV sales will represent less than 1% of the global car market by 2045, as more and more countries outright ban gas-guzzling jalopies.
Why should I care?
The bigger picture: It’s not just governments.
Carmakers are starting to lean into the inevitability of it all too. Take Honda: the Japanese conglomerate announced this week that it’ll completely phase out sales of traditional cars by 2040. It’s even staking a claim in the electric motorbike market, with plans to unveil three new all-electric models by 2024. Compare that to rival Japanese carmaker Toyota, which is still convinced that hybrid cars are the way forward.
For markets: When it rains, it pours.
There were two other big EV stories on Wednesday: Chinese EV-maker Xpeng Motors – which is already listed on the US stock market – announced plans to list on Hong Kong’s stock market via an initial public offering that could raise the company up to $2 billion. Then there was Embark Trucks: the company – which, deceptively, doesn’t manufacture EV trucks but their self-driving software – said it’ll be going public by merging with a special purpose acquisition company (SPAC) in a $5 billion deal.
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So there is fun to be had without logging onto Zoom: data out on Wednesday showed European business activity climbed at its fastest rate in 15 years in June.
What does this mean?
Monthly business activity surveys ask company purchasing managers how busy they’ve been compared to the month before, providing a near real-time snapshot of economic performance. And it was all good news for the eurozone, whose newfound growth was led by a manufacturing industry that now looks like it’s shaken off May’s sluggishness. Services activity continued to climb too, as the hospitality sector – and all the parched revelry-seekers – emerged blinkingly from lockdown. That uptick was particularly pronounced in Germany, which helped drive overall business activity in the eurozone’s biggest economy to its highest in a decade.
Why should I care?
For markets: Growing pains.
Economic growth came at a cost: the average prices paid by European managers for goods and services rose at their fastest since 2002. Suppliers are still struggling with both staff and stock shortages, and manufacturing and services companies alike are passing on higher costs to their customers. That may put more upward pressure on official inflation figures in the next few months. The European Central Bank reckons it’ll only be temporary, but investors are worried that if it persists, it could force the bank to raise interest rates and, in turn, drive down stock and bond prices.
The bigger picture: These shortages are a drag.
The most obvious victim of those recent global supply shortages are microchips, which doesn’t look like it’ll change anytime soon: new research this week showed that the average gap between ordering a chip and receiving that order widened to a record 18 weeks in May. That’s four weeks longer than 2018’s previous peak, and it’s more bad news for semiconductor-starved companies like carmakers.
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