Diversification needed to avoid electric car ‘calamity’, business analyst warns

Electric vehicles
Electric vehicles

Diversification into more secure electric car markets in needed to avoid a “calamity” in the sector, a top business analyst warned last night.

Peter Harrop, chairman of market research consultancy IDTechEx, claims it is “highly likely” that at least one major car firm will go bust during the switch to electric vehicles (EVs), even without a recession.

But Mr Harrop added that if big car firms wanted to survive, they need to diversify electric vehicles beyond the commercial car market and into areas of “secure growth”.

He said: “Car sales could peak earlier than our current forecasts of ten years or so and impact even electric car sales.

“No one will rescue a major just because it is promising to invest $10 billion in pure electric cars.

“At minimum, it will need to have strong EV sales of something: notably alternatives to the leading Nissan/ Renault, Tesla or Chinese pure electric cars selling so well – better still they should be active in the EV markets that have more secure growth.

They include unmanned mines to trucks, driverless city pods, boats, mobility for the disabled, silent air taxis allowed to fly all hours, regional airliners and even solar drones up for five years.”

Mr Harrop sees increased growth in the EV commercial sales market over the next ten years, but adds that it may not be enough to save some big firms.

He also forecasts a massive reduction in the cost of EV batteries.

He added: “Investors may shun EV makers and their suppliers where they are excessively exposed to cars, though a collapse in electric car sales (as opposed to overall car sales) within ten years is not likely without a massive recession.”

Last week, BP’s chief economist Spencer Dale warned the transport sector was only a “small part” of the overall carbon emissions issue.

He claimed that despite the increase in renewable energy, the power and heavy industry remains the greatest emitting sectors worldwide.

Mr Dale warned that although electric cars are “important”, they don’t “move the dial” in terms of lowering carbon emissions to any great degree.