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Electric Vehicles and the Supply Chain Industry: Top 3 Emerging Trends

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Archives, Global Logistics, Global Trade Daily, Trucking

Electric Vehicles and the Supply Chain Industry: Top 3 Emerging Trends

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Technology keeps evolving and impacting lives. It is changing how things happen in various industries worldwide. One of the most impacted industries is the supply chain industry, mainly because electric vehicles are becoming more popular now than ever before.

Research shows that by 2025, 30% of all vehicle sales will be hybrid electric vehicles and EVs. Vehicle manufacturers are doing their best to keep up with the demand for electric cars. This has been a result of carriers in the supply chain industry opting for clean-running vehicles.

It is vital to know how electric vehicles are set to transform the supply chain industry. This includes companies that offer car transportation services. In this article, you will learn about emerging electric vehicle trends. It will also look into how the trends will impact the supply chain industry.


 

Read on to find out more.

New Challenges for Automotive Companies

As mentioned earlier, technology has had a massive impact on automotive companies. Supply chain companies are looking for modern cars and trucks. Automotive manufacturers now have new challenges. The materials and parts used in making these cars are different from regular automobiles.

For instance, the designs have substantially changed in modern cars. In addition, the manufacturing process has also changed. Manufacturers have introduced different electronic components. Besides, other pieces of technology like sensors and microchips have also gained popularity in the industry.

Besides these changes, regulations have also become a challenge for automobile manufacturers. Every tiny part used in making modern cars needs to meet regulatory requirements. This hasn’t been an easy thing for car manufacturers worldwide. It has made it a challenge to meet the soaring demand for cars.

The challenges automotive manufacturers experience affects the supply chain industry significantly. It may delay the planned shift to more efficient cars and trucks. But so far, a gradual change has been possible. The reality is that a complete transformation to an energy-efficient industry is still far.

Increasing Demand for Electric Vehicles

The demand for electric vehicles in the supply chain industry doesn’t seem to slow down. For instance, most car shippers have already started changing their fleets. It could happen quicker if automobile manufacturers could produce as many modern cars and trucks as traditional ones.

However, three vital trends are emerging in this industry of late. These trends will impact many things including the costs of shipping cars. This comes as vehicle transporters plan to have more clean-running trucks in their fleets. EVs will reduce the car shipping operating costs and promote a cleaner environment.

This section will take a more in-depth look at the trends impacting vehicle shipping and the supply chain industry.

Here’s the first trend that you should look out for today.

1. Limited Lithium

Lithium-ion batteries power modern electric cars. But then, there have been concerns of whether there’s enough lithium to support their manufacture. This is because of the ever-growing market of lithium-ion batteries. Well, there have been reports that lithium is running out worldwide.

This hasn’t been good news to an already booming electric vehicle industry. It is even worse for the supply chain industry, especially auto car transporters. The planned shift to more efficient trucks to boost their car shipping business may not be achieved as soon as expected.

Predictions already show that at today’s prices, lithium could run out by 2025. However, the good news is that electric vehicles may reach cost parity with regular cars by 2024. That will make it easy for car transporters to shift to electric cars. It will also lead to an overall reduction in car shipping costs.

2. Lower Consumption

Consumption has been a concern for vehicle transporters worldwide. It is the consumption of shipping trucks that pushes car shipping costs high. But then, shipping a car will cost less when motor carriers change their fleets to include more energy-efficient trucks and some electric vehicles.

For energy-efficient trucks, it will be about low gas consumption and less pollution. This will mean well for the environment and also mitigate pollution-related diseases. The good news is that electric cars will take efficiency to a whole new level. They will also mean little or no pollutants into the environment.

This is what companies offering car hauling services want to achieve. They want to contribute to a cleaner environment. Besides, it will also help them keep up with regulations. This will, however, be achieved once electric cars become mainstream and cheaper.

3. Interdependent Supply Chains

There’s a lot more waiting to change in the supply chain industry. This is because changing car shipping fleets alone won’t be enough to achieve a sustainable energy revolution. Chargers and electrical grids will also have to convert to clean energy to achieve this transformation.

Another trend that you’ll see is an increase in the production of more efficient gas-powered cars. Car shippers will have both energy-efficient gas-powered and electric vehicles in their fleets. Thus, the production of gas-powered engines won’t decline like many people could be thinking.

This means that car suppliers will focus both on gas and electric-powered cars. Even if the prices of electric-powered vehicles drop in the future, they may remain relatively expensive. To be precise, the industry will have to wait at least 20 more years before seeing a complete shift in fleets.

Conclusion

The supply chain industry is one of the biggest industries in the world. It is also one of those set to get transformed by the mainstreaming of electric vehicles. This industry has been anticipating a change in trucks for a while. The primary aim has been to reduce consumption and costs as well as be compliant.

This has seemed to happen in recent years as more electric vehicles are getting produced. But it hasn’t meant anything for car transportation companies as they can’t replace entire fleets yet. The supply of electric cars remains low while the demand keeps rising every day.

However, the future remains bright as car manufacturers push for more production. The availability of raw materials like lithium will determine how soon this happens. Meanwhile, stakeholders in the supply chain industry, especially vehicle transporters, will have to be patient.

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Archives, Global Trade Daily, News

The Permanent Magnet Market to Expect Significant Growth Thanks to the Electric Vehicle Industry

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IndexBox has just published a new report: ‘World – Permanent Magnets – Market Analysis, Forecast, Size, Trends, and Insights.’ Here is a summary of the report’s key findings.

With the development of the electric car and electronic technology industry, the demand for permanent magnets shows significant growth. Thanks to government subsidies, China continues to maintain low market prices for permanent magnets and dominate the export market.

Key Trends and Insights

The permanent magnet market predicts significant growth in the coming years due to the rapid development of consuming industries: electric vehicles, wind turbines, electronics, household appliances. The highest demand is for high-performance and lightweight neodymium iron boron (NdFeB) magnets.

The expansion of the permanent magnet industry will be driven mainly by China’s consuming industries’ growth. According to the China State Council’s New Energy Vehicles (NEV) Industry Development Plan, NEV will account for 20% of the country’s total vehicle sales by 2025, up from a market share of just 4.7% in 2019. This will lead to a significant increase in the need for permanent magnets. In one NEV, permanent magnets are used 2-3 times more by weight than in a car with an internal combustion engine.

The widespread adoption of telecommunication technologies drives electronics production, which also stimulates the market for permanent magnets. According to the National Bureau of Statistics of China, the production of tablet computers increased by 33% in January-September 2020.

Subsidies from the Chinese government to the industry help the country keep prices on permanent magnets down, making the imported products uncompetitive on the local market.

The US government has also begun to actively subsidize the rare earth and permanent magnet industries to reduce dependence on Chinese imports.

China Is Set to Dominate the Permanent Magnets Exports

In 2019, the global permanent magnet market increased by 2.6% to $7.6B, rising for the third consecutive year after two years of decline. The market value increased at an average annual rate of +1.2% from 2012 to 2019.

In value terms, the largest permanent magnet markets worldwide were China ($1.5B), the U.S. ($866M), and Germany ($513M), with a combined 37% share of the global market. Indonesia, Canada, the Philippines, Japan, Mexico, South Korea, Viet Nam, Thailand, India, and Italy lagged, together comprising a further 34% (IndexBox estimates).

The countries with the highest levels of permanent magnet per capita consumption in 2019 were Germany (346 units per 1000 persons), Canada (275 units per 1000 persons), and Thailand (251 units per 1000 persons).

From 2012 to 2019, the most notable growth rate in terms of permanent magnet per capita consumption amongst the key consuming countries was attained by the Philippines, while permanent magnet per capita consumption for the other global leaders experienced more modest growth.

In value terms, China ($2.5B) remains the largest permanent magnet supplier worldwide, comprising 51% of global exports. The second position in the ranking was occupied by Japan ($541M), with an 11% share of global exports. It was followed by Germany, with a 6.9% share (IndexBox estimates).

From 2012 to 2019, the average annual growth rate in terms of value in China was relatively modest. The remaining exporting countries recorded the following average annual export growth rates: Japan (-7.4% per year) and Germany (-1.8% per year).

There were significant differences in the average prices amongst the major importing countries. In 2019, the country with the highest price was the U.S. ($20 per unit), while Indonesia ($3.3 per unit) was amongst the lowest.

Driven by increasing demand for permanent magnets worldwide, the market is expected to continue an upward consumption trend over the next decade. Market performance is forecast to retain its current trend pattern, expanding with an anticipated CAGR of +2.2% for the period from 2019 to 2030, projected to bring the market volume to 783M units by the end of 2030.

Source: IndexBox AI Platform

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Archives, Commentary, Global Trade Daily

Auto Purchases Reveal New Consumer Trends

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Same-day shipping, orders at the click of a button, e-commerce, automation, are all elements that strive to meet the ever-demanding market of consumers with Amazon standards, speed, and accuracy. While many millennials learn to adapt to this consumer culture, Gen Z understands it as a common standard.

Global Trade Magazine had the opportunity to take an inside look at how Gen Z is transforming auto purchases in an exclusive Q&A with Grant Feek, co-founder and CEO of TRED.

Why are consumers, particularly Gen Z consumers, moving away from the traditional auto purchase approach?

“Firstly, our data suggests that gen z consumers are very interested in owning and driving vehicles. Many prognosticators conflate the pending adoption of automotive technologies, such as autonomous drive, with a pending decline in car ownership rates – we don’t see the latter trend in our data.”

“Secondly, our data suggests that gen z consumers are more likely to purchase and sell vehicles in non traditional ways – we suspect that this trend has less to do with gen z’s overt aversion to buying a car traditionally, and more to do with the facts that gen z is (1) more comfortable using computers / trusting online marketplace technology and (2) less engrained in the pre-existing traditional vehicle purchase / sale process. In the same way, gen z’ers are more likely to have groceries delivered, rent clothing, hold cryptocurrency, etc.”

What is it about a dealership consumers are trying to avoid?

“Our data suggests that the #1 complaint with the traditional dealership buying experience, for all consumers (not just gen z), is that it takes too long. We also hear a lot of complaints about pricing.”

What negative associations are seen with Gen Z consumers and new car purchases?

“I don’t think that gen z sees negative connotations associated with car buying so much as gen z has more progressive consumer expectations. It’s important to keep in mind that these kids grew up with iPads in their laps and Amazon Prime at their fingertips. They’re conditioned for internet research and purchase convenience from birth.”

In what ways will the industry have to change to capture the attention of Gen Z consumers?

“Today the technology exists to allow consumer counter parties to deal directly with one another, without the middleman, while still enjoying the vehicle assurances and payment conveniences that they would get at the dealership. We think that’s the future of used car buying and selling for gen z in the US, as well as for everyone everywhere.”

What are the unique needs Gen Z brings to the auto industry? Are they realistic? Will they eventually phase out? 

“In the used car space, gen z buyers expect price transparency, vehicle history information, vehicle inspection information, the option to test drive, payment options, vehicle service and GAP options, and transaction assurance. Gen z buyers and sellers expect the very best of value. We don’t think these trends will phase out. We think the next generation will be even more “demanding” than is gen z.”

In what ways are peer-to-peer car marketplaces changing the game?  

“Peer to peer car marketplaces change the game because they put thousands of dollars per transaction back in the pockets of consumers – you can see Tred’s real time savings data here. In this way, we believe that peer to peer marketplaces will change how many high ticket products are transacted in the coming years: cars, motorcycles, RVs, yachts, boats, bicycles, homes, etc.”