Carmakers, battery suppliers and start-ups that can withstand short-term pressures will benefit from a new wave of demand in the future.

The increasingly common "reversals" in society are not only about drama but also about business opportunities.

For example, after being devastated by the COVID-19 epidemic, new energy vehicles are expected to enjoy a new round of good news. Many people will surely ask: What kind of logic is this? What is the basis?

Bloomberg, which makes this argument, is in fact trying to "beat the drum" before making a new case: CoVID-19 has caused the global car market to plunge and electrified vehicle sales have plunged, while power battery shipments have fallen, a trend likely to last until 2021.

Short - and long-term trends, however, cannot be equated

The present downturn of a year or two does not prevent a subsequent recovery. If the observation period is extended to five years, the production and sales of power batteries and electric vehicles from 2015 to 2019 have made great progress. From the perspective of industrial inertia, the possibility of a sudden drop from 2020 to 2025 is low.

The substantial investment of governments and automobile enterprises in the field of electrification, as well as the evolution and progress of electrification technology represented by batteries, will give new energy vehicles the most fundamental endogenous growth drivers.

A new round of positive short-term pressure

Bloomberg recently wrote that sales of electrified models could fall sharply in the short to medium term due to the impact of COVID-19. As a result, demand for power batteries is likely to fall for the first time this year, with global shipments expected to fall by 14 per cent and a slowdown likely to continue through 2021.

LG Chem has cut its annual sales forecast in the first half of this year, while other battery makers have been warning of a drop in shipments. The power battery industry's three-decade-long capacity expansion may slow temporarily in light of the tough sales environment facing automakers, bloomberg researchers predict.

Nevertheless, for electric vehicles and power batteries, the post-epidemic era is still a short-term pressure and long-term positive. According to Bloomberg, demand for lithium-ion batteries has more than doubled since 2015 and is expected to increase at least ninefold around 2029, compared with just 2019.

In the short term will suffer a decline in production and sales, but the industry is still optimistic about the long-term prospects of lithium-ion batteries. Zeng Yuqun, chairman of Ningde Times, said he remained confident in the market direction of power batteries, despite the temporary pressure from the impact of COVID-19.

It is worth mentioning that the sudden coVID-19 pandemic may be an opportunity for some countries to make the transition to the "new Four Modernizations". Europe's automotive powerhouses, including Germany and France, are using the recovery stimulus funds to help the industry transition from conventional fuel to electrification.

In France, for example, the government will provide about €8bn in recovery funds to the car industry, mainly to support sales of electric cars; Germany's stimulus package also includes about 5.6 billion euros for the auto industry and requires agencies to speed up infrastructure for electrification.

In June, it was revealed in the UK media that the government was considering a subsidy of up to £6,000 to encourage motorists to switch from diesel and petrol models to electric cars. The scrappage plan will be formally announced by Prime Minister Boris Johnson on July 6.

According to the latest news from Reuters in early July, Italy will join France and Germany in providing policy support to the car industry hit hard by COVID-19. The country's parliament recently approved a stimulus package to encourage the sale of advanced diesel, electric and hybrid cars.

In 2019, electric vehicles accounted for only 0.56 percent of all new car registrations in Italy, according to UNRAE, the European automobile manufacturers' association. Hybrids accounted for a slightly higher share, but only 6.1 percent. New car registrations in Italy fell by nearly half a million, or 46%, in the first half of the year, according to the Transport ministry.

The us is an exception to the new opportunities.

On the one hand, the government's support for auto policy is waning, and on the other, the us carmakers, constrained by cash pressures, have been forced to focus on their most profitable products, such as petrol trucks and SUVs. Sales of electric cars in the United States are expected to slow sharply in the coming months, according to Bloomberg forecasts.

Nevertheless, the United States is still in the transformation of the track gallop.

Gm is still trying to figure out exactly when to officially launch two crucial electrified models, the GMC Hummer and Cadillac Lyriq. The company's vice President for electrification and autonomous driving recently said the timeline for electric cars hasn't changed because of the outbreak, and some businesses have hit the pause button, but gm hasn't lost its pace in electrification.

A new breakthrough in power batteries

In addition to overall sales, in the next few years, the entire power battery industry will achieve a major breakthrough in cost. The price of lithium-ion batteries has plunged 87 per cent in the past decade, bringing the end prices of some electrified models closer to those of conventional fuel models.

From vehicle manufacturers, there has also been good news about power batteries. As recently as mid-June, Volkswagen Group announced an additional $200 million investment in battery technology startup QuantumScape, founded by a former Stanford university researcher, after pledging about $100 million in 2018.

And in May this year, Volkswagen has become China battery manufacturers hin gawker's largest shareholder, and Daimler plans to take a stake in first to the news of the battery is in the industry, it is clear that multinational carmakers want to accomplish the Chinese market the electrification of ambition, binding the battery supplier localization is one of the most important aspects of the subsoil.

Jeff Chamberlain, chief executive of Volta Energy Technologies, told Bloomberg: 'Renewable Energy and electrification are the order of the day. No force can turn the tide of history back. Like a train that has gone, no one can reverse it.' The Company is based in Chicago and focuses on energy investments.

Battery life, power and cost --

These are the three topics that battery makers are most focused on.

Ningde Times recently announced that it will soon mass-produce a battery that will run 1.2 million miles and last about 16 years. Chairman Zeng Yuqun told Bloomberg in early June that the company was confident in the new battery's performance and would start production as long as manufacturers were willing to place orders.

Tesla and GENERAL Motors are also working on batteries with a range of 1 million miles, but the companies have yet to specify a final date for official production. Doug Parks, GM's executive vice President, said at an event in May that the company had reached technological levels to extend battery life.

Tesla, for its part, said in a report in early June that conventional gas-powered cars in the United States were largely scrapped after about 200,000 miles, meaning longer-range batteries could significantly extend a car's life, especially for taxis or commercial trucks. Given the used-car market, the need is even more pressing.

Another key indicator of industry concern is -

The manufacturing cost of a power battery.

Here, Tesla has set the industry's cost structure on a par, with power batteries still accounting for about 30 percent of the total cost of electric vehicles. Breakthroughs in technology and manufacturing capacity have sent the price of lithium-ion batteries down sharply, from more than $1,000 a kilowatt-hour to an average of $156 by the end of 2019, according to Bloomberg data provider BNEF.

James Frith, an industry analyst at BNEF, said at a seminar in May that the average price of lithium-ion batteries is expected to reach $100 per kilowatt-hour by 2024, making it possible for electric cars to be as expensive as conventional fuel cars.

This will be a key technology to be broken through

In the anode of a cell, graphite is replaced by silicon.

Sila, a nanotechnology company that Daimler has invested in, recently said silicon could help increase charging times by at least 20 per cent and that the latest technology will be used in devices planned for the market next year. As early as around 2023, the company could apply the technology to supercars or luxury cars, and gradually to mass-market passenger cars.

Another inflection point may come from the commercialization of solid-state batteries. Once the solid state battery is put into production and application in large quantities, the safety risk will be greatly reduced, the energy density will be greatly improved, and the battery range will achieve breakthrough progress.

In BNEF's view, support for electric vehicles will vary widely between now and 2040.

In the U.S., for example, sales of electric vehicles will shrink to just 1.7% of the retail auto market by 2021. In Europe, the figure is about 5 per cent.

Although traditional fuel vehicles will still account for more than half of global car sales in the next few years, the market has already peaked and worldwide sales of traditional fuel vehicles, such as those in 2017, will not be repeated. By around 2025, one in every 10 cars sold will be electric, with sales then reaching about 8.5m; By 2040, battery-powered passenger cars could top 500 million, or 31% of the world's total.

Carmakers, battery suppliers and start-ups that can withstand short-term pressures will benefit from a new wave of demand in the future.