The US government has proposed standards for its plan to construct a nationwide network of 500,000 charging stations for electric vehicles by 2030. The proposed standards will assist states in laying the framework for charging station projects that will be accessible to all drivers, EV brands, and charging companies. The standards will provide for a single network of chargers that use the same payment systems, price information, and charging speeds. The law requires the provision of real-time pricing and location information on charging stations so that drivers can better plan their travels. In addition, charging stations will be mandated to have a certain number and type of chargers.
EV Market Overview
According to GlobalData, the global market value of EVs increased from $174.9 billion in 2020 to $219.3 billion in 2021, indicating an annual growth of 25%. Europe accounts for 43.7% of the global EV market value, followed by Asia-Pacific with 42.8%. The US is the third-largest market for EVs, after Asia-Pacific and Europe. Strong growth in the market is attributed to factors such as growing demand for low-emission commuting and government support for zero-emission vehicles through subsidies and tax rebates.
Challenges
Price inflation and instability of the supply chain of key raw materials for battery manufacturing are the major challenges for automakers and the electric cars market. Increasing global demand amid sharp increase in the adoption of electric cars, along with the disruption in the supply chains brought by the COVID-19 pandemic, pushed the prices of key raw materials. Recently, the Russia-Ukraine conflict posed an even more serious threat to the reliability of the supply chains. With Russia being one of the largest producers and exporters of nickel and cobalt, the disruption in the supply of these materials amid trade sanctions is set to be significant.
Outlook
In the short-term, automakers are expected to face difficulties, as the cost of raw materials for batteries, along with that of body parts (aluminum, steel), is rising as a result of higher costs of energy and the disruption in the supply chains caused by Russia’s invasion of Ukraine. On the contrary, the increase in oil prices is set to accelerate the demand for electric vehicles as higher fuel consumption costs for internal combustion engine (ICE) cars undermined their cost advantage. Government policies pushing for net-zero emission targets with the replacement of ICE cars with EVs will also stimulate sales over the coming years.
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