00:00Is this the big moment for the electric vehicle?
00:02The technology is more mature, the second-hand market loaded with deals, and skyrocketing
00:07fuel costs have turned on a massive consumer signal.
00:10EVs are no longer just an environmentally friendly choice, they're suddenly the cheaper
00:14one.
00:15We want to look at what new interest in EVs might mean for consumers and the global auto
00:19industry.
00:20We're going to look at three regions, the US, where Donald Trump hoped to kill EVs,
00:24but may have actually breathed new life into them.
00:26We'll look at China, the current hub of EV production, which is poised to benefit from
00:30even more EV uptake.
00:32And Europe, eager to decarbonize, but worried about its own industry.
00:39First of all, where do we see new interest in EVs?
00:42Car platforms across Europe are seeing more searches for EVs and improved sales since the
00:47beginning of the war.
00:48In Germany, new registrations of electric vehicles exceeded those of gasoline-powered
00:53cars for the very first time in March.
00:56Now, that's in part because Berlin resumed subsidies for EV vehicles, but it's also
01:01about the rising cost of fuel.
01:03In the EU, it was at an average of €1.81 per liter in mid-April, this was for Super
01:0895,
01:09and it was as high as €2.32, in that case in the Netherlands.
01:14New demand in the US is, meanwhile, harder to gauge.
01:17EV sales and interest in battery electric vehicles have been poor recently, with hybrids
01:22being the real outlier.
01:24Remember, under Trump, US policy has sharply shifted in favor of vehicles powered by fossil
01:29fuels.
01:30New EV sales tanked in the US last year after Trump ended a $7,500 EV tax credit.
01:37Now, US brands like Tesla, Chevrolet, and Ford dominated EV sales in the US last year,
01:41with Hyundai coming in fifth place. VW sold just over 22,000 ID.4s last year, that's its electric
01:48SUV, which put it in 10th place. But get this, in the final three months after that tax credit
01:53was scrapped, VW sold a mere 250 ID.4s in the entire US. Well, the company now says it's stopping
02:00production of the model in the state of Tennessee, and it calls it a strategic move.
02:04For the short term, we don't see any major return in electric vehicles across the US.
02:10Of course, the West and East Coast markets will continue to see an uptake, so California, for
02:17example. I mean, it's very fragmented across all states, but as a whole, the whole of the USA
02:24isn't expected to see electric vehicle uptake return to beyond 10% of the total market for
02:32a fairly long time going forward.
02:34Yet other data suggests the time is actually ripe for a resurgence in the US.
02:39For one, the used market for EVs looks much better than it did years ago.
02:44Unlike in other crisis and oil price shock times, this increasing EV demand is now
02:54hitting a more mature market. EVs as a product and e-mobility as a system is far more mature than
03:02it was,
03:02for example, in 2022 and earlier years, obviously. We have more affordable EVs. We have more available EVs with
03:12better range, faster charging.
03:15So, this demand spike is, on the one hand, a temporary effect, but it accelerates and
03:27supports a broader shift to e-mobility from our perspective.
03:32In other words, EVs are now a much better option than they ever were. And the incentive,
03:37again, is also quite good. Again, that's thanks to Trump's decision to go to war.
03:45The biggest winner of any dramatic swing in demand for EVs would appear to be China. It already
03:51produces more than half of the world's electric vehicles, and it's already a massive exporter,
03:56meaning it's poised to scale up and export even more and into new markets.
04:02China's dominance goes back decades to a very intentional industrial policy
04:06to swiftly build up an EV manufacturing system. But we have to look at who is the key
04:13beneficiary of that development at the moment. It's obviously the market or the player who can
04:24produce and develop EVs the fastest and also the cheapest. And this is clearly China.
04:33But China isn't just selling an end product that is competitive and often better and cheaper than
04:39European or US alternatives. Its dominance of certain supply chains and resources makes it
04:45difficult for competitors to even get a foot in the door. The battery supply chain for EVs still runs
04:51mostly through China. And China controls over 80 percent of global rare earth processing capacity.
04:57And it dominates the entire supply chain from mining to refining to manufacturing
05:01needed to make the magnets used in EV motors. Beijing can control global prices, secure domestic
05:08supplies and leverage export controls to disadvantage foreign EV manufacturers. In fact, in late 2025,
05:15we saw China tighten export approvals and ban certain critical mineral and rare earth exports to the US.
05:21And that was a response to tariff hikes by Donald Trump, which effectively forced the US to back down.
05:26But more of those tariff hikes in just a moment.
05:28They have built up the leading industrial base with the supply chain for batteries,
05:36with all the key EV battery manufacturers in China, with the huge supply chain for battery
05:44materials and everything which is required for EV production.
05:47Yeah, that battle's effectively been lost. A premium German manufacturer told me
05:53they simply can't ramp up at scale with the same level of efficiency as the Chinese.
06:00And they are in fact saying we can't catch up anymore.
06:05We're happy to effectively be held hostage to China when it comes to batteries.
06:13And that isn't likely to change going forward.
06:19China's rise has been both an opportunity and a headache for Europe.
06:23In many ways, the availability of cheap EVs dovetails with the European Union's broader push
06:28to transition to green energy. But here's what's important.
06:32Europe wants that transition to be as homegrown as possible,
06:35with local supply chains around batteries, charging infrastructure and renewable energy integration.
06:41Those low-cost, often higher-quality Chinese imports we talked about,
06:45they mean that the transition is more likely to be imported,
06:48unless European industries can find ways to cut their own costs.
06:52And that in turn makes the EU anxious about its own automotive sector.
06:56So again, while cheaper EV imports could accelerate adoption and help the EU meet its climate targets
07:02more quickly, and of course benefit consumers trying to lower their own bills,
07:06it does risk undermining Europe's industrial base.
07:09Now, that said, European car companies are still building out battery production
07:14and other supply chains. They're also now partnering with Chinese companies
07:18to get ahead and to learn how to be faster when it comes to making EVs.
07:25The US is also concerned about its auto industry competing with China,
07:29but unlike Europe, it doesn't quite have that pressure to decarbonize at the moment.
07:33The US has used aggressive tariffs to shield its domestic market.
07:37Last year, Trump introduced tariffs on Chinese goods of 145%,
07:41though they were later cut to around 55% following a trade truce in May.
07:46Well, those tariffs still have a big impact.
07:49US goods imports from China fell nearly 30% last year.
07:52That, and China's need to export to support its own economy,
07:56have created trade distortions around the world.
07:58Now, even with those tariffs, China has still managed to record a global trade surplus of
08:031.2 trillion dollars in 2025, but mostly by increasing exports to other regions,
08:08Southeast Asia, Africa, Latin America, and of course, Europe.
08:13Chinese goods blocked by US trade barriers often flood into the European market instead,
08:18further worsening the EU's trade imbalance.
08:20In fact, last year the EU's trade deficit with China jumped a whopping 18% to nearly 360 billion euros.
08:27The main factor here was the electrical machinery category,
08:31a category that includes EV batteries and other components,
08:34which accounted for nearly a third of all EU imports from China.
08:38While imports of cheap Chinese EVs rise, however, European car exports to China are falling.
08:44Take Germany.
08:45Automakers in Europe's biggest economy saw their Chinese market share fall from 24% in 2020
08:50to just 15% in 2024.
08:54And as I mentioned, China has made inroads into other markets.
08:57Its investment in Brazil's EV sector is surging,
09:00with Chinese brands there capturing over 80% of the country's EV market by early 2026.
09:05We very often think mainly about Europe and the North American market.
09:12But we also have to see that the biggest impact perhaps is on the rest of world markets in Asia,
09:19South Asia and in Africa and Latin America.
09:21And because there the price shocks in fossil fuels have a high impact.
09:33And on the other hand,
09:34the Chinese manufacturers are very well positioned there and have a very high market share already.
09:40So on these markets, I think the effect is even bigger.
09:44To wrap it up,
09:44the Iran conflict is sending shockwaves to global oil markets.
09:48But it's also placing new pressures and incentives around automakers and consumers
09:52that could be positive.
09:53It's such a volatile market environment at the moment.
09:59We've had the semiconductor crisis, we've had COVID, now we've had the Iran crisis.
10:08So yeah, it's just a number of hurdles that don't stop.
10:12But the positive thing from the industry's perspective is manufacturers are becoming more agile
10:19and are able to roll with the punches, if you like,
10:24and are developing new strategies to mitigate against these turbulent geopolitical situation
10:32we're in at the moment.
10:33The war is accelerating a shift in how we think about energy.
10:36And perhaps out of a moment of instability,
10:39a longer term transition may be gaining speed.
10:42One where energy is more local, more reliable, and hopefully cleaner.
10:49that's a very strong shockwaves for your body.
10:50to collect from adverse advances
10:50So it can allow noise for any of these obstacles that do not require
10:50these obstacles to avoid this崩ad.
10:50that's going to make ourselves less competition with practice?
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