The world is slowly transitioning to electric vehicles (EVs), and this is mainly spearheaded by Asian and European countries. For example, China is planning to phase out the production and sales of fossil fuel-powered vehicles in the future, and this will have a huge impact on the global automobile industry. The key to achieving this is by making an affordable electric car that the common man can own. Also, governments, auto manufacturers, and oil companies are waking up to this change and are beginning to adapt to this new reality. This article will discuss major ways EVs will change the world.
The shift in consumer demand for EVs became obvious for automakers in the last five years. Due to this, major automobile brands like Volkswagen, Audi, Volvo, Mercedes, BMW, and Jaguar began to introduce electric vehicles. The latest Volkswagen ID 4 is a high-volume, mass-market EV released by a major automaker, and this is a welcome change in the direction of electrification of automobiles.
Impact On Jobs
The processes and technologies used for manufacturing EVs have become cheaper. Compared to fossil fuel-powered vehicles, EVs require less labor for manufacturing. Due to this, phasing out of internal combustion engine vehicles can cause huge job losses in countries like Germany. One major factor that contributes to this is that auto manufactures are robotizing to simplify and increase the efficiency EV manufacturing. On the flip side, the ban on the sale of fuel-powered vehicles will create newer opportunities and jobs that supply part for EV manufactures in countries like China, India, and Japan.
The economies of oil-producing countries will be seriously affected, as well as the geopolitical map will change as most countries around the globe go all-electric by 2030 to 2040. This effect will be accelerated with the introduction of small electric cars in emerging and developing economies of the world. Besides, the countries producing lithium, cadmium, nickel, and cobalt will play a greater role in global geopolitics because these elements are required for manufacturing EV batteries. However, lithium is not as important as oil, because the latter is essential for operating automobile, while the unavailability of the former only affects EV production.
Impact On Government Revenue
Government revenue from fuel taxes will reduce from 2030 to 2040 as countries go all-electric. This will also be affected by the shared ownership of autonomous EV fleets. As a result, income from vehicle registrations and sales tax will also be reduced. Due to this, governments will be forced to find new revenue streams.
These are some of the major ways in which the shift to electric vehicles (EVs) is going to affect the global economy.