Lead image from Horizon Europe.
Sleepwalking Into Oblivion
Eurointelligence has an interesting article on how Germany is Sleepwalking Into Oblivion.
Current policy debates are rightly focused on the consequences of global bifurcation. But perhaps an even bigger danger for the EU is its failure to keep with the US and China on high tech. This is an area that is not on the radar screens of policy makers and the media. We noted a commentary in Germany outlining a scare scenario in which Germany would lose its leadership in the global car industry. The journalist concluded that this is possible but not likely. For us, this is the baseline scenario.
And so it seems for Federico Fubini, who has taken a deep-dive into the market for electric batteries in Corriere della Sera. Fubini notes that the European trade surplus in cars derives exclusively from the shrinking segment of fuel-driven cars. They are hopeless in the fast growing electric car business. The Chinese sold almost nothing to Europeans until recently, but they have become competitive in e-cars now (despite the protectionist EU car tariff). Fubini notes that the EU runs a trade deficit in this sector. Of the ten largest manufacturers of electric batteries, which is one of the core value-added components of electric cars, six are Chinese, three are South Korean, and one is Japanese.
The decline of the European car industry is a cautionary tale. It’s not just e-cars, but a whole array of 21st century technologies. Europe has no representative in the world’s top ten digital companies any longer. SAP now ranks number 11, and there is not much after that. Artificial intelligence is largely a duopoly between the US and China. The only European country with a foot in this sector is Brexit-Britain. The UK government has identified AI as the best bet for regulatory divergence from an EU that is hampered by data-protection laws with a one-sided focus on consumers.
It does not matter a great deal where the electric batteries are produced, but who owns them. The European car industry is dying, while the EU keeps on congratulating itself on the successes of its science and research programme, Horizon Europe.
Wave of the Future
EVs are the wave of the future whether anyone likes it or not. Eventually battery technology will be good enough and costs drop enough for widespread adoption.
Regarding artificial intelligence, Microsoft invested tens of billions of dollars and Google wants to catch up.
Meanwhile, the EU wants to bust up Google and Microsoft, and has little interest in AI other than wanting to regulate it to death.
The US leads in technology because the EU would bust up any company before it got big enough to lead on anything.
Proposed AI Pause
In the US, Elon Musk, the WSJ, and a group of signatories seek a 6-month pause in AI Development.
On April 1, I commented On the Proposed 6 Month AI Pause? Why Not 23? Forever? Better Yet, None at All
But a pause won’t happen, nor should it. Technology will not stop because some people worry that it will kill everyone.
The EU is behind with no intention of even competing. Germany still wants to protect diesel.
This post originated on MishTalk.Com.
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Mish
EV range, price and cost will all likely improve. What i don’t see changing much is the power supply for these 100s of millions of new vehicles everyone expects to see on the road. Last winter, there was a 2% margin on the UKs electric supply. And this is before extensive electrification of heat, which is being planned for industrial and domestic use. Where is the power coming from? Last nuclear power station was agreed back in 2008 and if we’re lucky will come online in 2028. Solar and wind are jast compensating for decommissioned coal. Overall there’s been no increase in electrical supply for a number of years
Do you think you will get more, or less capacity for that money?
That is certainly a possibility. The future is difficult to predict. But I am not as optimistic as you are in the timeline.
Using current numbers of 1.4 billion ICE vehicles, even if we produced 70 million EVs per year (and no ICE) it would take 20 years to replace the existing fleet. And that is assuming that the overall number of vehicles does not grow (which it will).
In addition, as many note here, it will be a challenge to find all the necessary materials to build that many EVs going forward, and enough renewable energy sources to power them, though technology is always improving.
All you’re gonna get is “woke woke woke”.