As the new year begins, the world is moving forward, and we have just received news from Sony Honda Mobility of a prototype vehicle to be unveiled at CES. However, with the Nissan SAKURA winning the Car of the Year award, we expect the Japanese market to show some growth in 2023.
In this issue of Blue Sky Technology, I would like to discuss the key trends in the North American and European markets this year, including my own personal opinion.

European markets: the shift to electrification is progressing; more electric vehicles were sold in Germany than in China in 2022/11.

According to the MarkLines sales database, the share of electric vehicle sales in November 2022 has reached 35.1% in China, but surprisingly, Germany has 39%. In Germany, where small EVs such as the Hong Kong MINI do not exist, we feel that the 39% figure indicates that European users are really starting to shift to EVs. The share of EVs in Japan is about 2%, and if you stay in Japan, you will hardly feel the wave of EVs, but you can feel that the shift to electrification is happening in Europe as well as in China.

North American market: Inflation-Reduction Act (IRA) has had a significant impact, and all but the local manufacturers in North America are preparing for the year ahead.

The most notable developments this year are in North America, where GM, Ford, and Chrysler (as brands under the Stellantis umbrella) are each planning to introduce EV models, including pickup trucks, to see how close they can come to Tesla’s nearly 70% EV share in North America.

Impact of the Inflation Control Act (1): Impact on assembled vehicles

One thing to keep in mind when considering the future North American EV market is the Inflation-Reduction Act (IRA) signed into law by President Biden last August. This bill provides a tax credit for consumers who purchase new EVs with the condition that the final assembly of the vehicle must take place in North America (the U.S., Canada, and Mexico). While the goal is to keep Chinese manufacturers out, it is likely to have consequences for allied automakers as well.

Currently, only Nissan is producing EVs in North America, and other manufacturers need to start EV production in North America as soon as possible, and 2023 will be the year to prepare for this.

Impact of the Inflation Control Act (2): Impact on Battery Materials

The IRA has also placed restrictions on raw materials, and it will be important to determine who will prepare the materials for future lithium-ion batteries for North America and how they will be prepared. The supply of this material can be considered both a risk and an opportunity in the battery industry. Currently, most electrode materials for lithium-ion batteries are made in China. In particular, graphite is the main component of the anode, and the raw materials are mined and processed in China. Co, Ni, and Li, the metals used in the ternary cathode, are mainly produced outside of China, but most of the post-production refining process is conducted in China. More than 70% of cobalt sulfate, 15% of nickel sulfate (second to Russia’s 21%), and 60% of lithium hydroxide/lithium carbonate are refined in China. The year 2023 is likely to see some movement toward this end.

postscript

I believe that the hybrid system, which is Japan’s forte, is extremely rational and is currently superior to EVs in terms of CO2 emissions when considered in terms of LCA. I say “currently” because the calculation of CO2 emissions in LCA depends on the way electricity is produced, so there is a possibility that the CO2 emissions of EVs will change. On the other hand, as is usual in the world, what is rational will not necessarily spread throughout the world, and conclusions will be reached in the midst of various speculations and competitive environments.

I myself began my involvement in EV development 15 years ago, and at that time, few people in the automotive industry believed that EVs would become widespread. Even among the automobile companies that were actually developing EVs, I cannot deny that I was treated as a “colorful” figure. Now, however, it is a world apart, and Europe and China, where the EV has gained so much momentum, will never go back to the original internal combustion engine.

We believe that some of you may be thinking of making changes in your business to take advantage of the trend toward EVs. We at Blue Sky Technology have many experienced members in the development of electric vehicles, so please feel free to contact us for further information.

We look forward to working with you again this year, when the wave of EVs is expected to increase even further.

Blue Sky Technology Inc.
President
YAJIMA Kazuo

　Blue Sky Technology is a unique consulting and engineering services firm specializing in automotive electrification and related technologies, with a majority of its staff having worked in the automotive industry for 20 to 30 years.
　From specialized requests such as development and design of electric vehicles, dynamic evaluation of vehicles, overhaul investigations, vehicle control, motor control, R&D of lithium-ion batteries and start-up of production lines, to consulting on electrification of each automotive component and adaptation of new materials to electric vehicles, We can provide support tailored to your needs.