Global Automakers Earmark US$600bn for EVs Over Next Decade: GlobalData
02 April 2022: Aggressive emission and carbon neutrality targets set by regulators worldwide entails a faster transition from traditional automakers to next-gen electric vehicle (EV) manufacturers. Therefore, automakers are committing operational investments of nearly US$600bn to secure their position in the future automotive market, says GlobalData, a leading data and analytics company.
Broadly, the investments announced focus on the development of production facilities, technology, EV batteries, new product and securing future raw material supply (primarily semiconductors and battery materials). Autonomous vehicle development also remains a closely linked area to the investments.
Bakar Sadik Agwan, Senior Automotive Consulting Analyst at GlobalData, comments “The investments affirm that the future must be electric and there is no turning back for traditional automakers. However, the flurry of announcements from the OEMs could also be interpreted as a high-stakes game of one-upmanship or a corporate PR exercise to boost investor confidence. With all OEMs taking the same path, it is unlikely that any long-term sustainable competitive advantage will be conferred and that visibility over the billions of dollars of planned xEV investment is a price of market participation.”
VW Group stays on the top of the list with US$100.5bn investment through 2030. Its ambition to surpass Tesla is no secret, and the company wants four out of every 10 cars it sells to be a BEV by 2030.
Agwan continues “A further analysis, looking at the contribution to xEV growth of each OEM derived from the latest LMC light vehicle powertrain forecast, sheds further light on the returns expected. VW is estimated to have the highest cumulative contribution to EV growth over the next decade when mapped against the investment announced, amongst the players analysed.
However, despite being a pioneer in hybrid vehicles, Toyota was slow to implement BEV strategies. Which happened with President Akio Toyoda announcing the bZ EV brand last year and planning to launch 30 models by 2030. Prior to this, Toyota had only a few BEV models manufactured with its Chinese partner GAC Group. Toyota announced US$70.4bn investment in EVs to 2030, early this year.
