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October 23, 2020 at 08:37AM

In a future driven by electric vehicles, China is poised to dominate if the U.S. does not transform its automobile industry in coming years. While California-based Tesla captured popular attention for electric cars, national policy in Beijing encouraged the launch of several rivals in China, the world’s largest auto market. Already, sales of electric cars and other new energy vehicles hit a record in September in China. Even Tesla launched a factory there last year, and is planning to sell made-in-China cars to Europe.

Powering it all are electric batteries – of which two Chinese companies, Contemporary Amperex Technology (CATL) and BYD, account for about a third of the global market, according to UBS. All six of the major battery manufacturers identified by UBS are Asian. “Over the next five years we anticipate Chinese players across the EV supply chain to aggressively enter the overseas market,” UBS analysts wrote in a note Wednesday. “We believe China materials costs are lower than the overseas market. If this advantage can sustain, China could realize a cost advantage over ex-China players.” The researchers expect CATL to increase its share of the ex-China market from 2% in 2019, to 14% in 2025, helped by “hyperbolic” growth of electric vehicles in Europe.

The U.S. and China have been locked in trade tensions for more than two years, which have spilled into technology and, to some extent, finance. As the world struggles to emerge from the coronavirus pandemic, ensuring the future of the local automotive industry is even more critical for both economies.

In the U.S., the industry supports 10 million jobs and contributes nearly 3.5% of national GDP, according to the House Committee on Foreign Affairs Republicans’ “China Task Force Report” out on Sept. 29.

In China, the auto sector accounts for about one-sixth of jobs and roughly 10% of retail sales, according to official figures for 2018 compiled by the Ministry of Commerce.

In just one sign of how far ahead China has progressed in electric vehicle development, out of 142 lithium-ion battery megafactories under construction globally, 107 are set for China, versus nine in the U.S., according to the report “The Commanding Heights of Global Transportation” released last month by Washington, DC-based advocacy group Securing America’s Future Energy (SAFE).
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China’s electric car strategy is starting to go global – and the U.S. is lagging behind, CNBC, Oct 23

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From: The FxPro News Team https://fxpro.news/daily-forex-outlook/chinas-electric-car-strategy-is-starting-to-go-global-and-the-u-s-is-lagging-behind-20201023/
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