Search this website. You can use fund codes to locate specific funds

Credit: Industry Insights

Plugging into the future: challenges and opportunities for electric vehicle (EV) adoption.

According to the Environmental Protection agency, the transportation sector generates the largest share of greenhouse gas emissions – and cars are the biggest contributors. As such, car makers have a key role to play in the fight to improve air quality and reduce emissions.

To mitigate climate change and improve local air quality, a growing number of countries have announced plans to phase out internal combustion-engine (ICE) vehicles and introduce new regulations. Several countries have also introduced targets to achieve net-zero emissions by 2050. Against this backdrop, EVs are forecast to hit 10% of global passenger vehicle sales by 2025, rising to 28% in 2030 and 58% in 20401.

Today, however, EV penetration remains low at 1% of total car sales. And so, in the latest instalment of Industry Insights, Ilana Elbim, Senior Credit Analyst, examines the barriers for EV adoption – for both manufacturers and customers.

Elbim explains: “Today EVs are not, if barely, profitable because of battery costs and the need to adapt production lines.” However, as technology improves, battery costs should fall. As such, she expects “a tipping point” in a few years’ time, “when EVs will be as profitable as ICE vehicles”.

With significant investment required to develop technologies for EVs, manufacturers are increasingly announcing partnerships with other competitors and with players outside the car industry. “This allows them to still position themselves for the future and lowers the impact on their financial profile,” Elbim adds.

How is the industry positioned for the road to zero? To find out, watch the short video below. 

More Insights

Inflation and supply chain disruption: Impact on corporate sectors
Inflation and supply chain disruptions, along with the moderating pace of the post-pandemic earnings recovery, have made us more cautious on corporate fundamentals as we enter Q3 reporting season
Japanese employment: engaging for greater equality – an update
A year has passed since we published a note exploring the long-standing issues around the under-representation of women within the Japanese labour force.
Lessons from the EU: Development of the UK’s green taxonomy
The UK is in a strong position to leverage the significant effort that has gone into creating the EU Taxonomy, whilst adapting the framework to suit the UK market where necessary
Global Equity ESG Fund: H1 Report, 2021
We continue to focus on the transition to a more sustainable economy, which we view as an exceptional market opportunity as awareness grows of sustainability issues and opportunities.
Direct lending: how senior is your debt?
Private credit is broadly described as non-bank lending where the debt is not issued or traded on public markets.
Credit Pulse: market update – 15 October 2021
In our latest Credit Pulse, we look at how sustainability is managed within our fixed income offering.