NEWS
New developments in Transportation
How the Ukraine crisis could scupper Germany's EV targets by Steven Gislam
T
he Russian invasion of Ukraine could prevent Germany from meeting its target of 15 million electric vehicles (EV) on the roads by 2030 says market analyst GlobalData. Germany, like most countries, has a plan for cutting its greenhouse gas emissions with a 2045 target for net-zero. Increasing the number of EVs on the roads was an important element for how the country was to achieve this target. According to Global Data, the crisis in Ukraine has led to an 18% rise in the price of Nickel - a key element in EV batteries - since the end of 2021 to over $24,000 (€21,800) per metric tonne. As a result, Germany could see stunted growth for EVs in the coming years. Figures from the German Environment Agency, Umweltbundesamt (UBA), show the country's transportation sector accounts for 20% of total emissions. Two of the major driving factors for EV adoption have been the central government subsidy and the battery prices. With battery prices set to increase and uncertainty on the central subsidy level from 2025, Germany may not be able to meet its EV target. Mohit Prasad, Practice Head of Power at GlobalData, said: "Russia is the world’s third-largest nickel producer. Nickel is a significant ingredient that is used in lithium-ion battery manufacturing. Batteries are the most important component of the electric vehicle. The Ukraine-Russia crisis has led to the highest increase of nickel prices in a decade." Automakers in Germany have already been affected by the crisis. Volkswagen, which had sold
over 20% of the country’s EV sales in 2021, has suspended production at two factories in eastern Germany because the crisis has interrupted deliveries of critical components from western Ukraine. GlobalData warns that if this continues, other manufacturers could also potentially suspend their operations. "Germany has set an interim target of 48.1% reduction in greenhouse gas emissions coming from the transport sector from the 1990 level by 2030. The growth of the electric vehicle market is important for this. The country has already crossed one million electric cars on the roads. Half of these are Battery Electric Vehicles and the remaining are Plug-in Hybrid Electric Vehicles. To reach its 15 million target only for EVs by 2030, the market should grow at a CAGR of 35%," Prasat added. "Considering the issues and delays related to the procurement of raw materials, which would be further amplified with the Ukraine-Russia crisis, the country could expect a muted growth in the EV sector. This might dent the country’s preliminary target to reduce greenhouse gas emissions coming from the transport sector by 2030." Nickel is not the only commodity necessary for car production that is set to be hit by the war. According to a report in The FT earlier this week, Ukraine supplies around 50% of the world's neon gas, an essential part of semiconductor production. Automakers have already been suffering from a yearlong shortage in semiconductors, and the Russian invasion looks set to further compound this problem. Visit: www.globaldata.com
Historic new deal could secure Africa's automotive future by Steven Gislam
A
historic deal has been signed by 12 automotive associations across Europe and Africa with an eye to accelerating the development of the African auto sector. While many across the continent and beyond view the automotive sector as playing a key role in African industrialisation, it comes with many challenges. Nonetheless, the African Association of Automotive Manufacturers (AAAM) believes that trade between nations across the continent can be bolstered and diversified through the development of a Pan-African Automotive Pact. Such a pact would look to expand the continent's market for new vehicles from one to five million units as well as connect regions. Infrastructure in some parts of Africa still resembles much of that built by the former colonial powers. Road links between competing European spheres of influence were often discouraged, and in newly independent nations, 78 Industry Europe
border controls tended to be tightened as a means of protecting internal trade. Roads built by the former powers tended to lead from mineral-rich inland areas to ports and coastal towns for transport of goods back to Europe, rather than between neighbouring areas. A number of modern major infrastructure developments, such as the Trans-African Highway network, are in place as a way to remedy this, but this must also be accompanied by a bolstering of the auto sector. One of the catalysts that led to the signing of the automotive agreement was the launch of the AfCFTA – African Continental Free Trade Area in 2019, which aims to ultimately create the world's largest free trade area among all 54 African nations. The MoU was initially pushed by the AAAM, along with the German car association the VDA, and the German-African business association Afrika-Verein, and has the support of both the European and African Unions.
According to the AAAM, the deal aims to "grow the automotive sector in Africa through integration into the global and European value chains". Following the signing, Dave Coffey the CEO of AAAM, said: "The trade and investment climate in Africa can only be improved together. We are convinced that Africa has great potential to develop a promising automotive industry that will provide long-term employment. "The fact that African and European associations have agreed on key points to further develop the industry on the continent is an important milestone. Now political representatives are to support this by creating the framework conditions for the industry to develop and grow." Visit: https://aaamafrica.com
