Automakers have accelerated investment in electric vehicles, according to a new report from BMI, the London-based research arm of the investment rating firm, the Fitch Group.
The public relations crisis around diesel engines, the attractive image of pure EV brands and the growth of the demand for pure EVs in China and Europe have helped push the investment in electric vehicles, the report said.
The figures compiled by BMI also show that electric vehicles account for a significant share of total investment within the auto industry.
“In 2017, the number of EV-related projects more than doubled to 72, up from the 35 announced in 2016. Given that there was a total of 272 autos investment projects announced and tracked by our Autos investment round-up in 2017, this means that EV-related projects accounted for an impressive 26.5% of all investment projects.
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“This is very disproportionate to the current sales climate whereby EVs only accounted for 1.3% of total vehicle sales in 2017 across the 52 countries that we currently have EV sales data for and it clearly illustrates the strong bets that automakers are placing on future growth in demand for EVs,” the BMI reported observed.
Globally, the most prolific original equipment manufacturers of vehicles have been European and Chinese manufacturers over 2016 and 2017. Daimler has announced the largest number of projects followed by BYD Auto, which is also pursuing an aggressive global expansion strategy.
Following these two, Volkswagen Group has shown strong signs of investment followed by BMW, which together with Daimler, highlight the strong push being made by German manufacturers, particularly those with premium branded divisions, the report stated.
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Geographically, Europe, over performed in the past two years, in terms of the number of projects announced, followed by Asia and the Americas.
With 26 projects announced, Western Europe attracted the majority of Europe’s investments with half of those announced in Germany, followed by four in the UK and two in Austria, Spain and France while Belgium, Sweden and Portugal all garnered one project each. Across Asia, China accounted for the lion’s share of investments with 13 projects announced, followed by India with only four.
In North America, eight projects were announced in the U.S. while three were announced in Mexico and one in Canada.
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While China had a smaller number of investments announced overall, the country still garnered the largest total investment in dollar terms. Highlighting the scale of the country’s EV industry, Chinese EV investments averaged $746 million per project compared with $395 million in Western Europe and $391 million in North America, according to BMI.