Electric mobility is coming faster than expected, it’s time to shift gears
According to the VDA (German Association of the Automotive Industry), electric mobility is coming faster than expected.
Even though combustion engine technology still dominates the global automotive market, a highly dynamic and relatively small market is emerging around electric vehicles.
What makes e-mobility look so appealing?
For starters, the tightening of regulations and the improved incentive systems for electric mobility to reduce CO₂ emissions. An increasing number of countries are currently promoting electrical car sales with massive tax incentives. For example, there will be no new registrations for conventional drives in Norway from 2025. While The Netherlands, Ireland, and Israel want to use only emissions-free vehicles starting from 2030. A sales ban on combustion engines is planned from 2040 in Great Britain and France. In the USA some states, such as California, plan to permit only emissions-free cars from 2040. When planning for future investments, suppliers can’t disregard these figures.
An increasingly electrified car world
Globally, a drastic increase in hybrids and electric vehicles can be expected between 2020 and 2025. The VDA predicts that “by 2030 a production share of electrified vehicles of 60% or more worldwide is likely”. According to VDA’s figures, China will be a pioneer here - one in three vehicles could be fully electric by the end of 2030. In Western Europe, the share could rise to 25% due to stricter regulations and driving bans. For Japan, Korea, and North America, a share of hybrid vehicles of around 80% would be conceivable. While only in Africa and South America a breakthrough is not to be expected so soon. The car world is becoming increasingly electrified.
How will the the e-mobility race affect the global wire and cable industry?
On the one hand, car manufacturers and automotive suppliers must make massive investments; while on the other, the level of investment is still out of proportion compared to demand. Therefore a weak sales development in the short term is expected.
At the same time, electrically powered vehicles promise higher sales for companies in the cable industry. High-quality cables are required to build various parts of the electric car: the charging cable and charging station, the inverter, the air condition compressors, the electrical heating, etc. Electrically powered vehicles promise higher sales for companies in the cable industry. Therefore, even though the situation is challenging, the wire and cable industry remains optimistic.
Time to shift gears
Changing times require flexible suppliers. The changes associated with the switch from combustion engines to electric motors are huge and will inevitably affect products and processes, but this is always the case when there is an ongoing revolution. In order to continue on the road to success, the wire and cable industry must therefore flexibly steer in the right direction. Then it will head full speed towards high profits.
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