More than 3,000 people have died from the coronavirus so far. And we still don’t know how far the virus will reach. At the same time, the virus is having an unanticipated impact on emerging technologies with global supply chains. That includes electric cars.
Vehicle sales in China, the world’s biggest EV market, tumbled in February. According to preliminary data from the China Passenger Car Association, retails sales of passenger cars fell by 80%.
According to Reuters, BYD’s EV sales are down 79.5% year over year. February sales by BAIC BluePark, the electric unit of state-owned BAIC Group, were down by 65.1% compared to a year ago. Last month’s sales by Volkswagen’s EV partner JAC are down by 63.4%.
Meanwhile, uncertainty about the coronavirus led to a plunge in oil prices. The drop is the steepest since the 1991 Gulf War. Oil futures prices on the New York Mercantile Exchange flirted this week with $30 a barrel.
Cheaper oil, and less expensive gas at the pumps, usually means a decline of interest in electric vehicles. Analysts are pointing to lower oil prices as a factor in Tesla’s shares falling this week.
The epidemic also forced temporary closures of Tesla’s new Shanghai car plant and stores throughout the country.
Spread of the virus coincided with the spring 2020 auto-show season, where the next generation of EVs would have been championed. Fiat defied fears to showcase the new 500e last week in Milan, just ahead of the entire country declaring a national emergency. But other automakers shifted to online presentations.
Most events are being canceled. General Motors announced yesterday that it was canceling next month’s planned reveal of the all-electric Cadillac Lyriq. A GM spokesperson wrote in an email:
Out of an abundance of caution, we have made the difficult decision to cancel the Cadillac Lryiq reveal in Los Angeles, California on April 2. We are currently evaluating future plans and will be touch soon with an update.
The impact of the coronavirus adds to woes created by the Trump administration’s tariffs on Chinese goods, including a 25% tariff on e-bikes, e-motorcycles, e-scooters, and e-skateboards. The pressure led last week to Boosted Boards, a leading maker of electric skateboards, to lay off most of its staff.
The most significant impact could be felt in the EV supply chain. Many automakers are already struggling with supplies of electric-car batteries. China is a major global leader in refining cobalt, currently an essential ingredient in EV batteries. A sustained impact on Cobalt processing facilities could affect electric-vehicle costs.
The bulk of the world’s lithium comes from China. Impacts from the coronavirus led Chinese lithium producer Ganfeng Lithium, which supplies Tesla and Volkswagen, to raise prices, although by less than 10%.
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