The automotive industry briefing
The latest news, views and numbers you need to know this month
News in Numbers
119
The global automotive technology and mobility sectors saw 119 M&A deals in 2022, up 17% from 2021, according to Hampleton Partners, a financial advisory firm for technology companies
£148.3bn
This is the amount that the FLA members across the asset finance, consumer finance and motor finance markets provided in new business in 2022, a 12% mark-up on last year.
£103.5m
The amount raised by Carmoola, a UK car finance fintech, during an £8.5m Series A round and a £95m debt facility to fund a ‘neo-car finance’ proposal launched ten months ago.
$300bn
A study from UK-based consultancy Juniper Research has claimed that revenue from EV charging will exceed $300bn globally by 2027, up from $66bn in 2023.
68%
Analysis by Transport & Environment, an NGO, suggests more than two-thirds of lithium-ion battery production planned for Europe is at risk of being delayed, scaled down or cancelled due to US subsidies and other factors.
Comment
There are several reasons why lithium-ion (Li-ion) battery technology has been chosen by every major manufacturer of EVs so far. First, lithium is the lightest known metal. Second, it holds a charge well compared to heavier elements such as lead, zinc, and nickel-cadmium. Plus, Li-ion cells have twice the energy density by weight of their nearest rival, nickel-cadmium cells. Finally, Li-ion has nearly 30 years of development behind it since Sony first introduced it in 1991.
However, lithium-ion technology is expensive and has been a limiting factor in the rollout of EVs. It is no coincidence that the first commercially successful Li-ion-powered EVs were premium models that could build the high cost of a battery pack into their purchase price. In addition to cost, lithium-ion cells are also quite heavy and bulky, blunting performance and efficiency.
Lithium-ion cells also present slightly different safety concerns compared with combustion-powered vehicles. There is no data to suggest that battery-powered EVs catch fire more frequently than fuel-powered cars.
Despite its shortcomings, lithium-ion is still the best and safest technology we currently have for high-capacity energy storage. Alternatives exist and may become more relevant in the future but there is still room for improvement in existing Li-ion chemistry, so we do not expect many major automakers to abandon it anytime soon.
– GlobalData, Thematic Intelligence report on EVs, January 2023
Quotes
Today, customers are being overcharged by leasing companies if they want to switch to a battery electric car. Leasing firms are too conservative when setting their monthly prices. Their rates reflect the state of play from five years ago. With this pricing strategy, their profits are obviously high and consumers are overpaying to go electric. At the same time, they are harming the BEV transition.
Stef Cornelis, director of electric fleets at Transport & Environment, an NGO.
British Ports Association chief executive Richard Ballantyne, following UK Chancellor Rishi Sunak’s announcement that the Freeports selection process will see the first sites in England set up by the end of 2021:
“This is a welcome development and by being more inclusive in terms of the number of freeports there might be, the government can now explore how to better deliver on its levelling up agenda without picking regions over each other. Coastal communities are often in areas of high deprivation and have also experienced challenges resulting from the coronavirus pandemic and lockdown so this potentially transformative policy will be welcomed across a range of suitable locations.”
I am a strong proponent of having more female representation in male-dominated fields, including asset finance and leasing. There is still a long way to go to change the stats in the industry – 43% of asset finance providers’ boards have no female members, according to a recent survey. But I’m hopeful that with the hybrid-working era, and with an increasing focus on gender diversity across the industry, we can shift the dial.
Ana-Maria Broscatan, senior governance analyst at Close Brothers.
See: ‘Our client-base is diverse, we should be too’: a profile