Jun 02, 2020 (IAM Newswire via COMTEX) -- Wise people say each problem is an opportunity in disguise and crisis are no different. Those in favor of clean energy see opportunity even in the pandemic. By seeing nature blossom as half of the world's population was kept in lockdown, more people could indeed feel more inspired to opt for EVs. But the consequent recession also implies cuts. Which vision of the post-pandemic future will prevail?
Electrification during the pandemic
As for corona- cancellations, Lincoln/Rivian SUV is the only one so far. And to be honest, it was quite a brave R&D abstract project. On the other hand, Ford Motor Company's /zigman2/quotes/208911460/composite F -4.36% far more important Mustang Mach-E still seems to be headed for production, although deliveries may be delayed. Over at General Motors /zigman2/quotes/205226835/composite GM -2.37% , early May prognosis is that it may have to work harder and put more resources on these programs to keep them on time, but there's no slowdown. And despite several launches being delayed or even cancelled, GM clearly stated that production remained intact.
Volkswagen's /zigman2/quotes/204431732/delayed VWAGY -1.56% new ID.3 is rolling off the assembly line in Zwickau, Germany, and YouTuber nextmove, who recently toured the facility, said he also saw another, newer model on the production line--the ID.4, an electric crossover that's expected to be similar in size and range to the Tesla Inc's /zigman2/quotes/203558040/composite TSLA +2.79% Model Y and, unlike the ID.3, will be sold in the US.
Even before the lockdown eased, Tesla was well-positioned. Moreover, recent events have only made it crystal clear that Musk plans to bring production back up to speed as quickly as possible. And he will use whatever means necessary, even if it involves getting himself arrested.
The situation in the U.S. varies greatly by state
So, the short-term production picture looks solid. But the long-term outlook greatly depends on government regulation. The Trump Administration is not letting fossil fuels die but its hostility to all things green is nothing new.
But things are more optimistic when looked at a state-level, especially when looking at California and Colorado. Despite the trucking industry attempting to play to COVID card, zero-emission and EV policies are being put forward.
Out of all coronavirus-related stimulus programs, US and China governments have been by far in favor of polluting industries. Two of the world's biggest economies have turned their back to environmental improvement.
Brighter skies in Europe
Despite Germany also not getting a very good score, Chancellor Angela Merkel has insisted that Europe's economic recovery plan needs to be based on the European Green Deal to keep a close eye on climate protection.
Enlightened governments are opting out from investing in dead-end internal combustion technologies. Even the severely hit Spain's government looks set to approve a package of climate-related measures that includes investment in EV charging infrastructure and the establishment of low-emission zones.
France Made EVs central
French President Emmanuel Macron announced an $8.8 billion plan last Tuesday to rescue the country's auto industry as auto sales fell 90% in April compared to last year. And boosting both production and sales of EVs is the main action of the strategy.
Macron wants France to become the leading producer of clean cars in Europe and compete fiercely with Germany for that leadership role. Consumer incentives to buy an electric car will also be increased from EUR6,000to EUR7,000. There will also be incentives for people to switch their old vehicles for a lower-emission model upgrade. The message is clear: the government is ready to ready to support the demand for vehicles as long as they are clean vehicles that emit less CO2, like EVs.
The figure does not include a EUR5 billion government loan guarantee under discussion for struggling Renault /zigman2/quotes/202090946/delayed RNLSY +0.37% which shuffled its short-term strategy with Nissan Motor Co /zigman2/quotes/207656007/delayed NSANY +5.82% to survive the coronavirus earthquake. It also does not include the millions the government has already spent on temporary unemployment payments to auto workers.
The French government owns a 12% stake in Peugeot's /zigman2/quotes/207803404/delayed PUGOY +0.98% maker PSA through the state investment bank. PSA might have reported record profits last year but its sales plunged with the lockdown. Its merger with Fiat Chrysler Automobiles /zigman2/quotes/204248628/composite FCAU +0.57% to create the world's fourth-largest automaker is very much on as the two companies will be sharing electric vehicle platforms.
Electrification is gaining momentum at 'enlightened' countries
The pandemic and the resulting economic damage that's just beginning to be felt has hurt auto sales across the board will surely impact electrification plans. But the technology as well as global demand for EVs have evolved too far to turn back. Odds are that electrification will only go faster, at least in the countries not willing to turn their back on climate change such as France. Like every other crisis, the pandemic will create winners and losers for years to come.
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