EXCLUSIVE Global carmakers now aim for $ 515 billion for electric cars, batteries

November 10 (Reuters) – Global carmakers plan to spend more than half a trillion dollars on electric vehicles and batteries by 2030, according to a Reuters analysis, increasing investment aimed at weaning car buyers away from fossil fuels and meeting increasingly harsh decarbonization targets.

Less than three years ago, a similar analysis by Reuters found that car companies planned to spend $ 300 billion on electric cars and related technologies. But threatening zero-carbon mandates in cities such as London and Paris and countries from Norway to China have given further urgent significance to the industry’s electricity-related investment commitments.

The latest analysis shows that automakers plan to spend an estimated $ 515 billion over the next five to 10 years on developing and building new battery-powered vehicles and switching away from internal combustion engines.

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Graphics about global EV investments: https://tmsnrt.rs/2Ys9BIk

But industry leaders and forecasting experts remain concerned that consumer demand for electric cars could fall far short of aggressive targets without significant additional incentives and even greater costs for charging infrastructure and network capacity.

Brian Maxim, head of global driveline forecasting at AutoForecast Solutions, compares the growing investment commitments in vehicle electrification to the Cold War: “When a few manufacturers announced EV programs, everyone else had to advertise their own or be considered abandoned.”

But he added, “this leaves a lot of automakers planning significant quantities for a vehicle category that has unknown consumer acceptance and wants minimal or no profit” for years.

Reuters compiled investment data from company statements, investor presentations and regulatory reports.

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An electric car is charged at an electric car charging station along the road, London, October 19, 2021. REUTERS / Toby Melville

Graphics about the car manufacturer’s EV investments: https://tmsnrt.rs/3o6pPj6

Other studies have come up with various expense projections. In June, consulting firm AlixPartners said the automotive industry’s investment in electric vehicles would reach $ 330 billion by 2025. By 2020, all global automakers together spent nearly $ 225 billion on capital expenditures and research and development, according to AlixPartners.

Tesla Inc. (TSLA.O), the world’s largest EV producer, appears to be the one company selling virtually all of the vehicles it can build, setting up new multi-billion dollar “gigabytes” near Berlin and Austin that will significantly increase its annual production capacity. In early November, the company was valued at $ 1.2 trillion, more than double the total value of Volkswagen AG (VOWG_p.DE), Toyota Motor Corp (7203.T), Ford Motor Co (UN) and General Motors Co (GM.N).

Meanwhile, political and legislative pressure is building on world automakers to begin phasing out the production of fossil-fueled vehicles, including petrol-electric hybrids, over the next 10-15 years, while increasing the production of full electric models.

A number of countries, from Singapore to Sweden, have said they will ban the sale of new internal combustion motor vehicles by 2030. US President Joseph Biden has said he wants 40% to 50% of sales to be electric vehicles by 2030.

Germany’s VW group, which is still recovering financially after the Dieselgate emissions fraud scandal in 2016, continues to lead the rest of the industry with more than $ 110 billion in EV and battery investment commitments until 2030. These commitments, which represent more than 20% of total industry, supports VW’s aggressive rollout plans for millions of electric cars in Europe, China and North America over the next decade.

VW’s investments, like those of many of its competitors, are aimed at improving the range and performance of batteries and lowering the cost of electric cars, as well as expanding battery and electricity production across the globe, according to public data released by the companies.

VW and other German car manufacturers Daimler AG (DAIGn.DE) and BMW AG (BMWG.DE) plans to spend a total of $ 185 billion by 2030, while US automakers GM and Ford expect to spend nearly $ 60 billion by 2025.

Chinese automakers, led by VW and GM’s local partner SAIC Motor (600104.SS), has announced well over $ 100 billion in investment targets over the next decade. Japanese carmakers lag far behind Honda Motor (7267.T), Toyota Motor and Nissan Motor (7201.T) so far publicly committed less than $ 40 billion in total.

These investments do not include the tens of billions of dollars invested in additional production capacity by the world’s largest battery companies, many in collaboration with their automaker partners.

Reporting by Paul Lienert in Detroit and Tina Bellon in Austin; Edited by Dan Grebler

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