Europe has given the world some of the most luxurious and popular car makers, but it is losing out to China when it comes to electric vehicles. China is a driving force when it comes to electric cars, mainly due to its high supply of electric vehicle batteries.
European leaders have previously acknowledged that these batteries are a vital piece to the emerging auto industry.
“Europe might well see its carmakers massively moving production to China in the future,” Simone Tagliapietra, an energy analyst at Fondazione Eni Enrico Mattei, a Milan-based think tank, told CNN. He continued, “This is a huge risk” for the region that’s home to companies like Volkswagen (OTC:VLKAF), BMW (OTC:BMWYY), Mercedes-Benz (OTC:DDAIF), and Renault (OTC:RNSDF).
Two-thirds of the world’s electric car batteries are currently being manufactured in China, and it only makes sense to produce the vehicles there as well. Especially with the new tariffs being implemented by President Trump.
China currently accounts for half of the global sales of all-electric cars currently. Europe only holds around one percent on the market currently.
“They [Europe] didn’t take electric vehicles seriously because they didn’t like them,” said Viktor Irle, co-founder of Swedish research firm EV-Volumes. “Until recently, many of the big players focused their resources on gasoline-powered cars.”
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Tesla (NASDAQ:TSLA) is currently building a factory in Shanghai that is said to churn out 500,000 electric vehicles a year. (Compared to the 100,000 it currently makes in the US.)
It remains unknown at this time if the battery manufacturer workers in China are being paid fair wages or if the factory work is very similar to all the others around the country, where children are even being employed. The country likes to keep much of this in the dark from the rest of the world, but as an investor, I would seriously investigate these policies.
Featured Image: Depositphotos /© Dmyrto_Z
