adoption of electric vehicles (EVs) is being described as a new era for the world economy. A significant amount of money and relationships are at stake in this transition. According to Bloomberg forecasts, the cumulative value of EV sales is expected to reach $57 trillion by mid-century, and potentially $88 trillion with additional incentives.
This has major implications for automakers and economies dependent on the auto industry. The rapid change caused by EV adoption has resulted in various flashpoints across the global economy.
Some of these flashpoints are related to environmental considerations, while others revolve around job and geopolitics issues. Two examples include Mexico, where President Biden’s incentives for producing in North America have led to a race with China to boost sales to Mexicans, and Thailand, where Japanese automakers have scaled back in the EV space, allowing Chinese investment to flow in and maintain job opportunities.
In order to sustain employment in the auto sector, investment in battery technologies is necessary. In the long term, the winners in the automaker industry are likely to be the leaders in EVs, with Chinese EVs catering to emerging economies and US EVs targeting the premium market. With the expected growth of EV sales surpassing internal combustion engine sales, automakers are investing more in EVs while decreasing investment in traditional vehicles. Economies that are slower to adapt to EVs may fall behind..