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Political
Energy security is a major worldwide political concern and a driver for governments to consider alternative fuels and to push electrified vehicles on to the market.
In the US, for example, it has been a major driver of the development of shale oil reserves and fracking for natural gas, which it is reported should see the US self-sufficient in energy by 2025. Earlier, energy security concerns had been a major promoter for using ethanol blends up to E85 in the US vehicle market. Globally, the essence of the problem is that the supply of oil resources is finite and that the majority of the world's oil reserves are with OPEC countries with which the west has traditionally had fractious relations. For example, according to the BP 2013 Statistical Review, Middle Eastern countries controlled 48.4% of the world's proven oil reserves in 2012.
Increased vehicle electrification will mean less demand from vehicles in use for oil, thus helping to reduce energy security as a governmental concern.
Not so long ago, the automotive industry was protecting an old technology yet nowadays it appears to have embraced the need for hybrids and the use of advanced battery technology.
Macro economic, political and environmental events such oil dependency, new competition and increasing carbon emissions have all contributed towards the new move to electrification of transportation.
Economic
COVID-19 likely to dampen demand and profitability across the auto sector
The emergence of the novel coronavirus strain at the end of 2019 has far-reaching implications for the entire automotive industry. In the short term, demand for vehicles and, therefore, the parts that go into making them has dropped significantly, which will see revenues and profits at most suppliers and OEMs drop rapidly.
In the longer term, companies will have to navigate resetting or restarting auto supply chains that could face additional restrictions following the outbreak. These additional costs, along with the dampened demand for parts and vehicles will weigh heavily on the balance sheets of both automakers and suppliers even once the virus is contained.
Meanwhile, the stubbornly high cost of battery packs remains a hurdle for battery producers. If the cost of battery packs can be significantly reduced, where will the cost reduction come from?
Some say efficient factory management,...