Prediction 3 – E.V.'s Reach An Inflection Point
That seems to have been vindicated in China, where more than 50% of new car sales, are of EV's, compared to just 6.3% in 2020. China accounts for around 60% of the EV's on the road, across the globe. It also accounts for about 60% of all existing charging stations, showing the link between the provision of infrastructure and adoption. It is that scale that has allowed China to massively reduce the cost of EV production, and of the provision of the required infrastructure, as against the protectionist claims of the US, and EU about dumping. The reason the US and EU are not competitive, in EV's, as against China, is simply that they have held back their own development of EV's, partly as a consequence of their measures of fiscal austerity that prevented the necessary spending on infrastructure, first for a standardised charging network, and, secondly, in investment in the electricity production and delivery that needs to stand behind it.
The protectionist tariffs being imposed in the US and EU against Chinese EV's, will only mean that their own development of EV production, and of the necessary charging infrastructure will be delayed further, leading them to fall even further behind, and lose even more competitiveness against China, as has always happened with such protectionist measures. Despite that, in the first half of 2024, global EV sales rose by 22%, compared to just a 3.7% growth of car sales in total. As noted in the prediction, many people are now able to use an EV for their daily requirements, charging it at home, or at work. The latter is also the basis for the growth in the commercial EV market. This continual increase in electricity demand, will, force electricity suppliers to increase their own production, and the state will have to ensure adequate infrastructure in the grid, or face increasing blackouts and brown outs.
The fact that the US and EU have chosen to hide behind an increasing protectionist wall, will not prevent China expanding its own production, and so increasing its technological and competitive advantage. Nor will it, on that basis, prevent it from, thereby, dominating the global market in Asia, Africa, and Latin America, where it has already been increasing its investments and trade. Indeed, the vehicles, and other manufactures, it would have sent to the US and EU, will, now, simply be diverted to these other expanding markets, whilst the US and EU consumers will face higher costs, which they will have to compensate via higher wages, squeezing US and EU profits as a result.
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