Market Analysis Analysis of Electromobility in Six Countries— Where to Invest Next

From MA Alexander Stark

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Electromobility is catching on and is forcing an entire industry to transform. But how do the individual markets develop in terms of demand, production and infrastructure? An analysis of six countries.

Norway currently has a connection density of almost 200 charging stations per 100,000 inhabitants. The Netherlands reached 192 in 2017 compared to 30 in Germany.
Norway currently has a connection density of almost 200 charging stations per 100,000 inhabitants. The Netherlands reached 192 in 2017 compared to 30 in Germany.
(Source: Public Domain / Pixabay)

Who buys electric cars, who buys hybrid and who buys fuel cell vehicles? What barriers do manufacturers face? Who are the key players? In which countries are major investments in production and infrastructure due? Where are the locations of the future? Germany Trade & Invest addressed these and other questions and examined the developments in 15 countries on three continents. We took a look at the study and summarized the development in six interesting markets. Germany and China were not considered.

Related: Development of Electric Mobility Until 2030


Electromobility in the USA

Demand in the USA

For car drivers in the USA, range is a decisive factor, and fossil fuels are also extremely inexpensive. As a result, cars with an internal combustion engine are clearly ahead of the competition. Thanks to falling battery prices, however, a breakthrough of fully electrified models can be expected in the medium term. Hybrid vehicles are already enjoying considerable popularity compared to BEVs. Hybrid models accounted for 2.1 % of total sales in 2017, while electric cars only made up 0.6 % of total sales. Toyota was and still is the industry leader. On average, the Japanese company sells 200,000 hybrids (HEV) and 21,000 plug-in hybrids (PHEV) annually in the USA. This corresponds to a market share of 60 and 24 %, respectively. However, Toyota has not yet introduced a purely electric model. According to Toyota boss Akio Toyoda, this is to change only slightly. The focus will continue to be on hybrid models until at least 2030.

However, fleet managers prefer the combustion engine for the time being. Both the range and the purchasing costs are important factors. Due to economies of scale in mass production, however, the manufacturing costs of electric vehicles are already declining noticeably. Between 2010 and 2017, the prices for lithium-ion batteries fell by 73 %. From 2022 onwards, e-vehicles should start to become the more favorable purchase. In general, sales forecasts for electric drive systems in the USA are pointing upwards in all vehicle classes. Sales by BMW, Mercedes and VW are expected to grow rapid until 2025. The three companies are aiming for e-models to have a share of around 20 % in each of the companies’ sales volumes. On the other hand, competitors from Asia expect their growth rates to amount to two to six percent.

Production in the USA

US car manufacturers are investing billions of dollars in the development of new drive systems. They are responding to China's announcement that they will no longer allow vehicles with internal combustion engines in a few years' time. Since 30 % of global total production is sold in China, the US must keep pace with technological progress. The USA itself is also the source of additional adjustment pressure on car manufacturers. Some states are tightening their emission regulations. In addition, the purchase of electric and hybrid vehicles is going to be promoted by tax incentives.

Tesla has been positioning itself as a pioneer amongst US car manufacturers. The Model 3 is intended to enter the mass market. According to the company, Tesla built 76,000 electric cars in 2017. By 2018, this number is expected to be around 100,000. In any case, there is no shortage of interested parties: there are around 450,000 orders worldwide. The pressure to succeed is enormous, not least because the Model 3 consumed over four billion US dollars in development costs. In addition, competitor General Motors is trying to secure a piece of the cake with its Chevrolet Bolt. Additionally, GM plans to launch a total of 20 battery-powered vehicle models by 2022. Ford enters into partnerships and forges alliances. The E model, which will be on display in the salesrooms from 2020, is to flush money into the cash registers. The Focus Electric, C-Max Energi and Fusion Energi models are already in production.

The third US company, Fiat Chrysler Automobiles (FCA), also produces its Pacifica minivan as a plug-in hybrid version and the Group brand Fiat contributes the 500e. In general, however, the FCA Group is showing noticeable restraint with regard to electromobility. Nissan also produces electric cars in the USA. Annual sales of the Leaf II are expected to level off at between 40,000 and 60,000 units in the foreseeable future. In the meantime, Volkswagen would like to manufacture its I. D. Crozz in the USA without mentioning a specific location. The plant in Chattanooga (Tennessee) is considered as the most likely location. Mercedes, in turn, will have an electric SUV rolling off the production lines at its Tuscaloosa plant in Alabama. It is, however, still unknown when production will start.

Infrastructure in the USA

Charging stations in the USA are extremely unevenly distributed. On the west coast, along the highways and in major cities there is the densest network. One of the most known initiatives is the West Coast Electric Highway, which connects the states of Washington, Oregon and California. Refueling is possible after 40 to 80 kilometers. Funding is provided by private and public sources. Tesla has also installed charging stations at 375 locations. From one to the next Tesla station, an average of about 100 kilometers can be covered. Tesla wants to double the number of charging stations in the medium term. According to the US Department of Energy, there are approximately 16,000 public and 3,000 private charging stations nationwide. For comparison: owners of petrol and diesel vehicles have around 112,000 filling stations with up to 30 petrol pumps at their disposal. However, improvement is in sight: In the course of the Diesel affair, VW has signed a commitment to invest two billion US dollars in the expansion of the charging network over the next ten years.

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