EXCLUSIVE-Global carmakers now target $515 billion for EVs, batteries

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Nov 10 (Businesshala) – Global automakers are planning to spend more than half a trillion dollars on electric vehicles and batteries by 2030, according to a Businesshala analysis, driving car buyers away from fossil fuels and meeting increasingly tough decarbonization goals. To increase investment with a view to fulfillment.

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Less than three years later, a similar analysis by Businesshala found that car companies plan to spend $300 billion on EVs and related technologies. But zero-carbon mandates in cities like London and Paris, and countries ranging from Norway to China, have provided additional urgency to the industry’s EV-related investment commitments.

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The most recent analysis shows that carmakers plan to spend an estimated $515 billion over the next five to 10 years developing and manufacturing new battery-powered vehicles and moving away from combustion engines. But industry executives and forecasters are concerned that consumer demand for EVs could fall far short of aggressive targets without substantial additional incentives and could lead to spending even more on charging infrastructure and grid capacity.

Brian Maxime, Head of Global Powertrain Forecasting at Auto Forecast Solutions, likens increasing investment commitments in vehicle electrification to the Cold War: “Once a few manufacturers announced EV programs, everyone else had to announce their own or should be seen as being left behind.”

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However, he added, “this has led to many automakers planning a significant amount for the vehicle category, which has unknown consumer acceptance, and will yield little to no profit for years”.

Businesshala compiled investment data from company statements, investor presentations and regulatory filings.

Other surveys have come up with different spending estimates. In June, consulting firm AlixPartners said the auto industry’s investment in electric vehicles would reach $330 billion by 2025. In 2020, all global automakers spent about $225 billion on capital expenditures and research and development, according to AlixPartners.

Tesla Inc., the world’s largest EV maker, appears to be selling nearly every vehicle it can build and is building new multibillion-dollar “gigafactories” near Berlin and Austin to increase its annual production capacity. Will give a big boost to At the beginning of November, the company was valued at $1.2 trillion, more than twice the combined value of Volkswagen AG, Toyota Motor Corp, Ford Motor Company and General Motors Company.

Meanwhile, political and regulatory pressure is building on the world’s carmakers to phase out production of fossil-fuel vehicles, including gasoline-electric hybrids, over the next 10-15 years, while accelerating production of full-electric models. Is.

Several countries, from Singapore to Sweden, have said they will ban the sale of new combustion engine vehicles by 2030. US President Joseph Biden has said that he wants 40% to 50% of sales to be electric vehicles by 2030.

Germany’s VW Group, which is still recovering financially from the 2016 Dieselgate emissions fraud scandal, continues to lead the rest of the industry, with more than $110 billion in EVs and battery investment commitments by 2030. Those commitments, which represent more than 20% of the industry total, underscore VW’s aggressive rollout plans for millions of EVs in Europe, China and North America over the next decade.

According to public data released by the companies, VW’s investments, like many of its rivals, aim to improve battery range and performance and reduce EV costs, as well as expand battery and EV production around the world. are from.

VW and fellow German automakers Daimler AG and BMW AG plan to spend a combined $185 billion by 2030, while American automakers GM and Ford expect to spend about $60 billion by 2025.

Chinese automakers, led by VW and GM local partner SAIC Motor, have announced more than $100 billion in investment targets over the next decade. The Japanese automaker, with Honda Motor, Toyota Motor and Nissan Motor, is publicly committing less than $40 billion combined so far.

These investments do not include the tens of billions of dollars being invested in additional production capacity by the world’s largest battery companies, many in collaboration with their automaker partners.

Reporting by Paul Leinert in Detroit and Tina Bellone in Austin; Editing by Dan Grebler

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