Special Topic: Global Acceleration into the Electric Vehicle Era

Electric vehicles are back on the scene

The development of electric vehicles from human-powered wagons to self-powered vehicles initially took place in three directions. The earliest ones were powered by electricity and steam and then came the modern automobile, which is powered by an internal combustion engine. Therefore, the automobile was originally referred to as the steam locomotive running on the railroad, and the abbreviation “automobile” was used, and after 1905, the concept was replaced by the automobile, which has its own power to drive. It is a vehicle that has its own power to drive forward, and does not need to rely on tracks or cables, but can be driven by power. Broadly speaking, a vehicle with two or more wheels powered by a prime mover can be called an automobile; narrowly speaking, a vehicle with three or four wheels or more powered by a heat engine is an automobile (also known as a car in life).

Electric vehicles are not new, in 1896, the Hartford Electric Light Company introduced an electric wagon with replaceable batteries, the buyer only buys the vehicle but not the batteries, and then pays a per-mile charge and maintenance fee when it is in use. The end of the 19th century to 1920 was a peak in the development of purely electric vehicles. In the early consumer vehicle market electric vehicles had advantages over internal combustion engine-driven vehicles: no odour, no vibration, no noise, no gear shifting, and low prices, creating a three-way vehicle market split between steam, electric, and internal combustion engines.

The first automobile with an internal combustion engine was built by Nicolas-Joseph Günther, and the German engineer Karl Benz is regarded as the father of the modern automobile. After the three-wheeled automobile, Gottlieb Daimler was the first to build a four-wheeled automobile, and the American Henry Ford was the first to mass-produce affordable automobiles and was the first to popularize the automobile.

The automobile has changed the operation of modern society. People’s activities are no longer confined to the areas that they can reach on foot. The range of daily activities was extended from two or three kilometres to tens of kilometres, and the number of things that could be experienced increased geometrically, thus cities were built. Cities were built, and gas stations to provide fuel became a symbol of social development.

Today, however, as mankind recognizes the damage that burning gasoline has done to the world, but still needs to maintain the development of society, the electric car has once again become the focal point of society’s future development. Today, with the technology of lithium-ion batteries, which are capable of storing a large amount of electricity, the electric car has entered the market rapidly, and in a short period of time, will be a major turning point for society’s development by eliminating the fuel-guzzling automobile.

As the car market enters the era of intelligent electric vehicles, both new car-making forces and traditional car companies are competing for the right to speak in the era of intelligent electric vehicles. Everyone is running to avoid being left behind by this era. Electric vehicles are definitely the trend of the future, and there is no turning back from the future that is now foreseen.

The global automotive landscape is entering a whole new phase

At present, the speed of development of electric vehicles has reached a critical point in the world. After accumulating enough use, economies of scale, and in the process of continuous refinement, one after another in many countries explode. One of the most obvious is China, and the United States has also seen a significant increase in growth under President Biden’s administration, “Electric vehicles are about to revolutionize the auto industry. All automakers know very well that if they don’t get into EVs, they will have to wait for the industry to wither away. Although there are still many uncertainties in the EV market, and it may even be revised significantly in the future, the compound annual growth rate for the next 10 years is about 21%, which is equivalent to an annual growth rate of 20%, and the growth rate will be higher in the first 5 years, and then slow down again. Looking around the world, it’s hard to see a market that matches Tesla’s except for the artificial intelligence (AI) industry.

Today, Tesla is gaining market share, new electric car brands are competing, and traditional car companies are transforming. Even Toyota Motor, one of the industry leaders that has been quite conservative and lagging behind in the “turnaround”, announced a new organizational structure this year, as well as a series of personnel changes, which was interpreted by the outside world as a signal of Toyota Motor’s comprehensive evolution and entry into a new era. Beginning this year, Toyota will build China as a self-circular intelligent and new energy vehicle research and development system, the future does not rule out the expansion of research and development from China to the world, which is Toyota’s long-term goal vision. By 2024, Toyota will launch two locally-developed pure electric vehicles in China, and continue to increase the number of models in the following years. In the U.S., electric vehicles are also growing faster than the overall market.

In the era of traditional fuel vehicles, the century-old automotive industry had a strict, or customary, “established process”, with a relatively fixed breakdown of the race track and the opponents in it. But today’s intelligent electric vehicles are not bound by such a “framework”. The rapid development of EVs is also highly relevant to the role of policymaking in various countries. Some regions in Europe and the US have explicitly set a ban on the sale of new fuel-efficient vehicles between 2035 and 2040, which means that the fuel-efficient vehicle industry is expected to shrink, and maintenance and spare parts will not be available in full supply in the future.

The Key to Becoming an EV Power: Battery Development

While China’s share of the world’s EV pie may shrink as the pie gets bigger, the Chinese market is growing very strongly, overtaking Japan as the world’s largest exporter in the first quarter of this year due to economies of scale developed in the country’s home market, which minimizes costs and hones product competitiveness based on consumer feedback. However, although China’s EVs have achieved good results in Southeast Asia, South America and Israel, the brand favorability of each country’s exported products is directly based on the country’s favorability, which is why China’s EVs are most frustrated in the U.S. This is why BYD is reluctant to enter the U.S. market for the time being, and it’s not easy to enter the European market, which is a war-torn country, because of the fierce competition in the European market.

China’s automobile industry used to lag behind the rest of the world. However, after the reform and opening up of China, large western automobile companies were introduced to set up factories in China, which trained up a large number of automobile manufacturing technicians, and coupled with a large number of workers’ relatively cheap salaries, the production costs were greatly lowered, making China a global automobile production powerhouse. In addition to technology transfer, many new automotive technology, especially the production of electric vehicles, China has been ahead of the world.

When it comes to the winners of the EV industry, the key components of EVs that will revolutionize the automotive industry are batteries, actuators, and system controllers. Just as the automotive industry left behind about 3 to 4 brands in each country, the logic of thinking in the EV era is also the same: there is enough room for profit only if you are in the top 10 of the world’s sales volume, so the US, Europe, and China will all have about 3 brands. The current winners in the EV market, be it China’s BYD or Hyundai, or America’s Tesla or Germany’s Volkswagen, will have to develop faster charging, longer range, lighter weight, and safer batteries in the future. Batteries account for 40% to 60% of the total cost of an electric vehicle, and it can even be said that whoever masters battery technology will have a chance to gain a head start in the next-generation electric vehicle market, and Telsla has found that becoming a leader in the electric vehicle market is due to Elon Musk’s success in the development of lithium-ion batteries.
Battery technology is changing rapidly, and investing more resources in research and development to find new breakthroughs is the key to the acceptance of electric vehicles as they begin to replace fuel vehicles. China has not always emphasized much basic science research and is believed to be a bit behind the West in this area. However, China has the talent in this area, and it is not difficult to develop scientific research once it is ready.

Chip Technology

In addition to batteries, automotive chips also play a very important role in the key components of electric vehicles. Especially since the ultimate goal of electric vehicles is to develop fully automated vehicles, the demand for automotive chips with relatively high heat resistance is bound to grow exponentially in the process of continuous upgrading, which is why Germany invited Intel and TSMC to set up factories in the country. Batteries for electric vehicles, automotive chips and other fields, there will be a trend of change in the industry in the future, the rapid pace of technological development, every once in a while there will be some “killer” new products, changing the life of human society, electric vehicles have gone

through a relatively stumbling period of fumbling, has reached the stage of maturity, the whole take-off faster.
The development of automotive chips is different from the use of mobile phones and other manual computing tools because there is no need to consider the issue of miniaturization. However, automotive chips still require high-speed computing power, and each electric vehicle requires an extremely large number of chips, so the production capacity of high-quality automotive chips also determines the development of the electric vehicle industry. Under the influence of the US-China technology war, the US has banned many chip technology companies from exporting their latest technology to China, which will affect China’s EV production. Whether or not China can make a breakthrough in its own R&D and production of chip technology will be the focus of the world’s attention.

Australia needs to catch up

The International Energy Agency (IEA) predicts a 35% increase in electric vehicle sales from 2022 to 2023, which would mean that electric vehicles would account for 18% of total vehicle sales. Based on governments’ stated policies, EVs will account for 35% of global car sales by 2030, up from the 25% forecast in the 2022 outlook. Meanwhile, global oil demand for road transportation will peak around 2025 and then decline. Around 42% of the world’s automotive markets say they will ban the internal combustion engine completely by 2035. In Australia, the uptake of electric vehicles has been slower so far, and there is more work to be done in the future.

Although the number of EVs on Australian roads almost doubled last year, from 44,000 at the start of the year to more than 83,000, the number of EVs on Australian roads has increased by more than half in the last three years. However, the gap between Australia and countries such as the UK, US, France and Germany in terms of EV penetration has widened dramatically over the past three years. Specifically, demand and supply issues are hindering the adoption of EVs in Australia. On the demand side, there is a lack of federal incentives to purchase EVs in Australia, somewhat similar to those offered by some states and territories. On the supply side, the main issue is the lack of fuel efficiency standards, which require vehicle manufacturers to meet certain emission limits for their entire fleet or face penalties. Such a situation could reinforce Australia’s global position as a ‘dumping ground’ for highly polluting vehicles. This oversupply of cheap, polluting vehicles will make it more difficult to increase the popularity of electric vehicles.

As more people use electric vehicles and charging them at home becomes a regular feature of their lives, Australians are more likely to accept them. With high energy prices and many homes equipped with solar panels to generate electricity, charging your own electric car can be very economical. As long as there are more places in the community where charging services can be provided, such as shopping malls, fitness studios, community centers and other places where people will stay for a period of time, and change people’s living habits, the replacement of fuel vehicles by electric vehicles can be carried out at a high speed.

In this way, Australia has seen the situation clearly and will accelerate the popularization of electric vehicles. Emission reduction targets by the federal and some state governments, consumer willingness and an increase in the number of charging facilities provide the basis for accelerating the take-up of electric vehicles, balancing the constraints of supply and demand. On the positive side, public charging stations in Australia have increased from 783 in 2018 to nearly 3,700 in 2022, and by 2040, the country is estimated to have around 350,000 public charging stations. Meanwhile, according to a survey by the Electric Vehicle Council, more than half of Australians now think their next car will be an electric vehicle. The global expansion of Chinese EVs into the Australian market has also highlighted the price advantage. All these signs give us some hope for the future of the Australian EV market.

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