Demand

The tax incentive programs for EVs and hydrogen vehicles have not led to as high of an increase in growth as initially hoped. This may be partly because of the shortage of raw materials for batteries and issues regarding hydrogen containers. However, the future is finally looking bright again for EV and hydrogen technologies. In the USA, the stable demand growth for hydrogen vehicles has sparked the interest of profit-hungry entrepreneurs, who are eager to monetize the vast natural gas reserves in the country. This should decrease fueling costs, and thus increase demand even further. China, on the other hand, is still betting on EV technology.

Costs

This day should mark the end of the raw material shortage saga. One individual European research group has managed to make a breakthrough with solid-state batteries. This not only eliminates the dependency on the scarcer materials, but also brings tangible benefits relating to cost, performance and safety. The battery manufacturers are already looking to seize the market opportunity. We can expect a moderate decrease in production costs for hybrids, and a more substantial decrease for EVs. While the hydrogen vehicles gained some extra footing thanks to the issues regarding batteries, we can expect demand for hybrids and EVs to start picking up again. The manufacturer of hydrogen containers has developed the component further, and it has already been certified by the regulatory bodies. The improved container is more expensive than the previous iteration, but it definitely remains cheaper than the original. The role of automation keeps increasing in the industry. On the one hand, the significance of a workforce decreases, and variable production costs become lower. However, the increased emphasis on the role of machinery drives up plant construction costs.

Finance

Thanks to the lower corporate tax rate, Europe has managed to attract companies back under its wing. But there are also growing signs of a recession raising its head in Europe. For the time being, the ECB holds its interest rate at 1.0%, though it also predicts a downward trend in its interest rate policy. USD and RMB gain 5% against EUR.

Sustainability

Suppliers are still wrestling with the new processes and facing pressing issues while adapting to new environmental standards. Therefore, they have not been able to increase production capacity to pre-crisis levels. Additionally, the decrease in capacity has, in a straightforward manner, affected the profitability of suppliers, who have in turn increased their prices to offset some of the accrued costs.