See Where Automaker’s Electric Car Investments Are Going

Volkswagen will lead electric car investment

JAN 12 2019 BY WADE MALONE 18

No one is shocked that China will see the largest slice of the pie.

Over the next decade, automakers will be investing heavily in electric vehicle technologies. Reuters analyzed investment and procurement budgets announced by automakers over the past two years. According to Reuters, $300 billion is currently devoted to EV technologies.

So what is fueling this move away from fossil fuels? One of the main contributors is growing consumer demand. The other primary reason is greater pressure from governments around the globe. Emission and fuel economy standards are becoming stricter. In addition, many nations are now mandating electric car sales.

At the same time, consumer demand is being boosted by longer driving range, lower battery costs and quicker charge speeds. As a result, more EVs and PHEVs will hit the streets, increasing visibility and further increasing demand for driving electric.

See It Graphed

Electric Car Investment Graph From Reuters

It should come as no surprise that China is receiving the bulk of automaker’s financial investments. The country has been pushing heavily for plug-ins via EV mandates and purchasing credits. Currently, over $135 billion dollars have been announced for investments in China.

German automaker Volkswagen is leading the pack with $91 billion planned for electric car development. Volkswagen has $45.5 billion aimed at the Chinese market. Daimler ($42 billion), Hyundai/Kia ($20 billion), Changan ($15 billion) and Toyota ($13.5 billion) round out the top 5.

In contrast, early leaders in the plug-in space have announced more modest investments. Nissan, Renault and Tesla are all on the record with $10 billion. General Motors has promised $8 billion, while BMW has announced $6.5 billion and BYD plans for $3.86 billion. These lower numbers are likely because these automakers have already sunk significant amounts of money into electric vehicle technologies.

Naturally, actual spending will almost certainly be higher. The assessment does not include spending by automotive suppliers, technology companies or other organizations that might work with automakers. For the full breakdown by automaker, check out the link below.

Source: Reuters

Categories: Battery Tech, China, General, Nissan, Renault, Tesla, Toyota, Volkswagen

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18 Comments on "See Where Automaker’s Electric Car Investments Are Going"

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If Tesla only spend $10B over the next ten years, I’ll eat my hat.

It’s not clear what these figures actually include, but if we’re counting a decade of capex on EV-specific projects over ten years, it’s a flying certainty that Tesla will spend a lot more than $10B.

I suspect most of the other figures will be substantially higher in reality as well; the EV revolution is going to accelerate, and that will force all of them to keep increasing their investments.

This shows, again, that German manufacturers are the uncontested announcement kings.

do you think it won’t happen?

No, they will make a lot more announcements, for sure.

At this point all indications are that the VW Group will dominate the EV passenger vehicle market just as they have been on top of the ICE passenger vehicle market.
Telsa has great product but no where near the industrial might of VW.
As for the other players (especially the other dominant ICE player, Toyota) who knows.

All that might, and more of it is going to China than to Germany, and nothing’s going anywhere else. What does this tell us? The Germans are planning for a future where the car industry is walled off by trade wars and government mandates into completely separate fiefdoms where consumers have completely different ideas about what a car is. Cars will not be exported, they’ll be made in place by foreign-owned factories designed entirely to meet local requirements.

Why so little investment going to North America? Because VW has already written off the USA as a significant market, not even bothering to send EV money to Mexico where it prefers to build small cars. Because Mercedes will keep cranking out gasmobiles in its Alabama plant, giant SUVs and luxury barges. They are not going to try to export EVs from China to America in the current climate, and high costs make German exports unprofitable for smaller cars.

Of course China’s rulers don’t agree with this German vision, but they have to be patient while the trade wars do their worst.

Toyota will jump in when they see VW start eating some marketshares in Asia and then will pivot

Those investments are approved by the supervisory board of each OEM and announced all over the press, so for shareholder protection the German Big-Auto companies can not just pull out of these investment pledges without getting into trouble with SEC and inviting law suits.

The clear message here is that foreign investment is going to China. Where are the lines going into the US (which was the dominant ICE market for a very long time).?

Exactly my thoughts … I would have thought that the lines from Germany go not only to China, but also to the US … I guess they do not want to deal with Trump’s great again America 😉

The point is that this Graph is wrong. Tesla invests in china Right now and has plans to build a factory in europe too. VW and Mercedes-Benz have plans to invest in EV-only- factories in the US as well…

No for a Europe. Go for China and emerging Africa

Well China has adopted a pretty harsh schedule for the phase-out of non evs. it’s sort of odd the way they are doing it, based on an increasing percentage of evs. So 8%, 10%, 12%, going up a few percent a year. Legacy auto hates it, they got a year reprieve, which has now passed. Sales in China of auto’s ‘s are falling and lots are full of old inventory, like 200 days worth.
Legacy auto has been overproducing the wrong sorts of cars, ice, and underproducing the right sort, evs.
Now they are scaling back as many: Ford, GM, Jaguar, VW, Honda, announce lay-offs, plant closures, reallocations, reorganizations, discontinuing models, and this is just the start.

Good. That’s there faults. GM is doing pretty well in the Middle Kingdom

China is obviously also the destination for double-digit billions of investments by the world’s automotive component suppliers – of which not a single American one is among the top ten.

It’s worth noting how squeezing cash out of a company by any means versus designing advanced, attractive products for the gigantic world market results in different long term outcomes. The leading suppliers generate sustainable profits.

The world’s ten biggest automotive suppliers by turnover in 2016 [source Handelsblatt | 14.09.2017]:
1 – Bosch | Germany | 44B EUR
2 – Continental | Germany | 41B EUR
3 – Denso | Japan | 36B EUR
4 – Magna | Canada | 35B EUR — from comparatively small and free-trading Canada can compete successfully, but not a single American automotive supplier makes it into the top ten?
5 – ZF Friedrichshafen | 32B EUR | Germany
6 – Hyundai Mobis | 30B EUR | Korea
7 – Aisin | 28B EUR | Japan
8 – Bridgestone/Firestone | 23B EUR | Japan
9 – Michelin | 21B EUR | France
10 – Faurecia | 19B EUR| France

Maybe the suppliers are becoming the true automobile industry, and the famous brands are empty shells sustained by their long-developed domination of the media and dealer networks. There’s very little relationship now between building a good car and selling it.

It’s amazing to see the future shifts in auto production graphed out like this. People blasting the Germans (deservedly) for empty announcements should note that such announcements work as propaganda only IF you say the money is going to build cars your target audience can expect to buy. Yet VW and Mercedes are making it clear that their real agenda is China. Does anyone think Chinese-built VW and Mercedes EVs can safely be planned for export to America under the current political climate? After the trade wars hit in 1930, it took decades of negotiations to undo the damage despite the sudden rise of America in 1945 as both global dominator and champion of free trade. There’s no one who can play that role after this round of trade wars peters out.

I’m assuming Nissan and Renault are split up by their home nations. Otherwise I don’t see where all that Japanese money is coming from, or why the French money is so small.

Similarly, Jaguar/Land Rover must be in the UK category, even though it’s owned by India’s Tata.

All of Sweden’s money is going (back) to China. I see you, Geely/Volvo.

I’m not sure how usable this information really is? It simply seems to be based on announcements which likely misses the majority of actual investments. We seem to be reading the tea leaves here.