Electric cars: Five years to catch up with China

Alexander Gruzdev: We are facing high inflation and rising interest rates which have affected car sales. The lack of vehicles on the new car market has inevitably led to delayed purchases and an increase in second-hand prices. And despite more optimistic forecasts than the previous two years for 2022, the new recession has squeezed car sales to less than 14 million units and down 14%, even lower than in 2020, the year of the pandemic which was at 14.7 million. The ongoing shortage of microchips added to the increase in the cost of raw materials and many components, have raised prices significantly, everywhere.

A.G.: They are booming thanks to personal tax credits, but the rising price of gasoline has also played a role. In addition, there are also new measures to support car manufacturers, notably via the Inflation Reduction Act. Despite this, some believe that this will not be enough for the United States to compete with China in this arena, especially on charging infrastructure. Experts estimate that the gap will be closed is five years.

A.G: Of course, and they are going all out! In 2021, Ford announced its intention to invest with the Korean company SK Innovation to build an electric battery factory in the United States costing around €11 billion. General Motors itself has invested almost €7 billion in the production of electric trucks and batteries for light vehicles in its Michigan factories. And the Inflation Reduction Act will further increase these investments! This law aims above all to protect national interests and provides significant subsidies to support the "green" sectors of the economy, with tax deductions for the purchase of an electric vehicle for example. This law is making waves between Europe and the United States even though it has not yet started, because it could affect the flow of investment from the EU to the United States. Hopefully they will find some mutual agreement on this.

A.G: It remains the main problem, this shortage of personnel also affects qualified people. Year to year, this problem worsens with the increasing complexity of vehicles requiring new skills in the workshops, and this is where the problem is most acute. This is as true for dealerships as it is for independents and repair shops. From my point of view, the solution lies in the specialization of mechanics who could subcontract their services. In this way, a person trained in the repair of injectors in dealerships could work as a subcontractor in the dozens of workshops around them. Garage employees would mainly focus on maintenance operations and tyres that generally do not require specific knowledge.