China continues to lead globe on electric vehicle sector development

16 July 2018

Reducing the impact of transportation on the environment is an increasingly key aspect of wider shifts in thinking about sustainability in global order. New analysis shows that adoption of electric cars across major regions has picked up pace, with growth of 57% between 2016 and 2017. Further growth is expected, particularly in China and Europe as the technology matures.

Climate change is no longer in question. The Paris Agreement set clear targets that must be met to stave off the worst effects of our impact on climate, with an upper bound of 2.0 and a strongly preferred target of 1.5 Celcius. Getting there will require considerable shifts in how we and the next generation live. The move will require the leveraging of a number of technologies that are clean in terms of their operation on the environment, while focus on efficiency and productivity in the use of energy too is on the cards.

One segment that must transform is transportation. Internal combustion engines are no longer sufficient to stay within the climate budget left within the 2.0C target. Electric vehicles, leveraging green energy, have a host of benefits over traditional vehicles – including low emission and pollution profiles. And while there are environmental costs associated with the production, these, coupled with a decarbonisation of the electricity sector – are more palatable than the alternative.Global rise in electric car salesGiven the necessity of the shift to electric vehicles or other alternative carbon-free engine types, thinking has shifted to the mammoth task of developing such vehicles, and getting consumers and businesses to invest. Shifts are already taking place, with major Western manufacturers developing vehicles in various classes, resulting in 340 different models in the BEV and PEV range set to be available in the next three years. A new report from McKinsey & Company considers trends in the shift to sustainable vehicles.

The number of electric vehicles has grown steadily, up from almost none in 2010 to 1.2 million in 2017 – representing around 1.3% of the total new light-vehicle sales globally. The growth has been meteoric over a number of years, although on a relatively low-base. Growth appears to be accelerating as more and more OEMs develop propositions in the space, with a 57% increase between 2016 and 2017.China worldwide leader for electric car sectorChina remains a key driver in the space, with growth between 2016 and 2017 topping 72%. The region is keenly aware of the cost of pollution – and with its long-term planning has begun to push the development and rollout of electric vehicles across its market. Growth is driven by a combination of strict regulations on ICE vehicles and subsidies – while new energy vehicles also sport their own license plates that provides users with benefits.

China is one of the key adopters in terms of currently on the road vehicles, at close to 2.2% of total new sales. Norway is the runaway leader in terms of adoption as it stands, at almost 50% of new vehicle sales, although the adoption reflects subsidisation by the Norwegian government. Switzerland, Sweden and the Netherlands round off the top five in terms of adoption.Electric car market value and country development indexesIn terms of development of the industry, China leads the way, followed closely by Japan and Germany. Meanwhile, the US is not too far behind; yet the UK founders at the bottom of the pack. China, as a global leader, has invested heavily on developing and holding components and production within its boundaries.

China has also been the fastest in terms of its rollout on both the IEV Index and the MEV Index, more than double that of Germany in the same period, while Japan has lost ground as it lost some of the component production capacity. Germany has improved somewhat in both indexes as companies in the region see increasing demand for electric vehicles.Development curve of electric car market by countryThe study also considered where countries currently find themselves on the disruptive trend radar with respect to their adoption of EVs. Norway has passed into inevitability, as critical mass has been reached, while Sweden and China show the clear emergence of a validated model. Other countries are also noted as exhibiting faint signals with lots of noise regarding their shift away from internal combustion engine (ICE) vehicles.

Other studies highlight that the near-term will see battery costs decline steeply, while a host of regulatory conditions will see ICE vehicles become unpalatable to societies. The necessity of meeting the climate accord will see the end of ICE vehicles, with considerable benefits to society, particularly from reduced pollutants in high-density areas.

The authors conclude; “Electric vehicles have made meaningful progress in several regions and countries as they passed the milestone of one million sales in 2017. With demand rising and manufacturers ramping up production capacities, the market will continue to grow. Looking forward, the confluence of government action, greater attention by original equipment manufacturers, rising customer acceptance, and ingenious suppliers could accelerate the segment’s profitability until the early to mid-2020s.”

Beijing and Tokyo emerge as serious tech hub rivals to Silicon Valley

12 April 2019

As Silicon Valley struggles with a number of institutional issues, the location of the world’s top tech-hub may ultimately change – with Beijing and Tokyo emerging as serious contenders according to a survey conducted by KPMG.

Now into its seventh edition, KPMG’s Technology Industry Innovation Survey quizzed over 700 global tech executives on their thoughts on the future industry landscape – revealing that for the first time more than half of the respondents (58 percent) believe Silicon Valley will no longer be the technology innovation center of the world in just four years from now, with Beijing and Tokyo seen as two possible usurpers.

“Many factors affect a city’s perception as an innovation hub, including favorable government policies and incentives, accelerators, tech parks, corporate investment, state-of-the-art infrastructure and, in all cases, at least a few highly successful and wildly popular success stories,” said Peter Laco, an Executive Director at KPMG in Slovakia, of the previous survey.Top contenders for the next world-leading technology innovation hubWhile New York remains the most touted hot-spot among respondents, Beijing and Tokyo landed in the second and third spots as likely contenders for the global tech-hub crown, with seven Asian cities featuring among the top dozen; Shanghai (in equal 5th, but overtaken by Beijing), Taipei (in joint-5th as a notable riser), Singapore and Seoul (at 7th and 8th) and Hong Kong, which rounded out the top dozen. Shenzhen, meanwhile, has dropped outside the top 20.

With access to talent and quality infrastructure remaining key attributes for a successful hub, the report states that, despite all the positive business factors present in Silicon Valley, “an escalating cost of living, questions about diversity and corporate cultures, high business taxes, an overmatched infrastructure, and even increasing scrutiny into data privacy and other business practices are contributing to the perception that Silicon Valley may not continue to dominate.”

Still, the US (which also featured seven cities among the top 20) as a whole is still considered the country expected to produce the most disruptive technologies in the coming years, maintaining its top spot ahead of China despite a narrowing of the gap by two percentage points on last year (to 23 percent against 17 percent). The UK meanwhile has gained some separation on Japan in fourth, while Singapore, South Korea and India appear among the top ten.Countries that show the most promise for disruptive technologyTo gain further insight into the likelihood of a burgeoning tech-hub reaching the peak of the global pecking order, KPMG analysed the results of the survey against a range of other city indices, including A.T. Kearney’s 2018 Global Cities report and Mercer’s Quality of Living rankings – identifying Singapore as the most consistent Asia Pacific performer across the board, with Tokyo, Seoul, and Hong Kong lagging in a variety of areas.

“The belief that Silicon Valley will be displaced as the leading hub underscores the continuing decentralisation of technology innovation, spurred by investment in other cities and regions globally, as well as contributing factors in Silicon Valley,” says Tim Zanni, KPMG’s global technology sector leader. “Even when faced with pressing issues that call for funding, cities and countries are carving out significant investment to become a technology innovation hub due to an expected broad economic impact.”