Brief Summary
The video discusses the current state of the car market, particularly focusing on the challenges faced by manufacturers in transitioning to electric vehicles (EVs) and meeting emission targets. It highlights the struggles of major German brands, job losses in the automotive industry, and the impact of government mandates. The video also explores alternative solutions such as sustainable fuels, plug-in hybrids, and range extender vehicles, while questioning the feasibility of achieving 100% EV sales by 2035.
- Car manufacturers are facing significant challenges in transitioning to electric vehicles due to slower-than-expected adoption rates and business case failures.
- Major job losses are occurring in the automotive industry, particularly in Germany and the UK, due to the shift to EVs.
- Government mandates for zero emissions and the push for pure electric vehicles are creating a standoff between manufacturers, consumers, and policymakers.
- Alternative solutions like sustainable fuels, plug-in hybrids, and range extender vehicles are being explored, with China's "new energy vehicle" mandate offering a more flexible approach.
- The high cost of charging EVs on public networks and the falling price of conventional fuels are further complicating the transition to electric vehicles.
Introduction to the Car Market in 2025
The video begins by addressing the current disruption in the car market and the challenges manufacturers face in meeting zero emission mandates and the EU's cutoff of internal combustion engines by 2035. Manufacturers had anticipated a smooth transition to electric vehicles, but this has not occurred as expected, leading to business case failures and potential job losses. The situation came to a head at a recent motor show in Munich, highlighting the lobbying efforts behind the scenes within the EU. The host mentions his experience with sustainable fuels and their potential as a solution.
Manufacturer Struggles and Job Losses
The video highlights the struggles of major German car brands, with the Mercedes boss describing the current situation as "suicidal" and "terminal" for their business if they continue on the current path of electrification. Ford has also announced job losses in Cologne due to disappointing sales of their new electric vehicles, despite significant investment in a new plant. These decisions to mass-produce electric cars were made pre-lockdown, driven by net-zero agendas and the perceived success of Tesla. However, the premium EVs that have been launched have suffered from lower-than-promised range, high costs, and significant depreciation, making them unattractive to consumers.
Impact of Chinese Car Market
China's massive car production capacity, estimated at 50 million vehicles per year with a domestic market of only 28 million, is putting pressure on other markets. The excess 22 million cars are being sold elsewhere, including the UK, and China is looking to expand further into Europe despite tariffs. In Germany, the auto industry has already experienced 51,000 job losses in the last 12 months, and VW has requested 35,000 redundancies by 2030, indicating a significant impact on the market.
UK Car Sales and Emission Mandates
The video presents data on UK car sales, showing a decline from a peak of 2.65 million in 2016 to 1.94 million in 2024. The average age of cars on the road has increased from 8 years in 2019 to 9.5 years in 2024, indicating that people are holding onto their cars for longer. The UK has a zero-emission mandate requiring 28% of sales to be electric cars by 2025, rising to 80% by 2030 and 100% by 2035. Europe has a similar mandate, but with a potential allowance for e-fuels and sustainable fuels beyond 2035.
Sustainable Fuels and E-fuels
The video discusses the potential of sustainable fuels and e-fuels as an alternative to complete electrification. Motorsport, including F1, Le Mans, and Dakar, is increasingly using sustainable fuels, raising the question of why the car industry cannot continue with internal combustion engines beyond 2035 using these fuels. The host shares his experience of running his cars on sustainable fuels for over two years, noting the seamless transition and the ability to mix fuels. However, sustainable fuels are currently expensive, costing around £4.50 a liter, although the host is part of a subsidized trial.
Types of Sustainable Fuels and Aviation Industry
There are two main types of sustainable fuels: those developed from cellulose, waste food products, or forestry, and e-fuels, which are produced using electrolysis to split water into hydrogen and oxygen, and then combining the hydrogen with CO2 from the air. The aviation industry was initially considered a primary recipient of sustainable fuels, but authorities are now hesitant due to the need for identical fuel chemistry worldwide. This may lead to more focus on sustainable fuels for cars and transport in general, but investment is needed, which is hindered by the 2035 ban on internal combustion engines.
Plug-in Hybrids and China's Approach
The host expresses his preference for plug-in hybrid vehicles, which offer many of the benefits of electric motoring without the downsides of relying on the public charging network. He argues that a broader approach to reducing emissions is needed, rather than solely focusing on battery electric vehicles. China's "new energy vehicle" (NEV) mandate, which includes battery electric vehicles, plug-in hybrids, range extender electric vehicles, and fuel cell electric vehicles, is presented as a more flexible and effective solution. Range extender vehicles, which are primarily electric but have a small engine to generate electricity and extend their range, are proving particularly popular in China.
Charging Infrastructure and Costs
The video emphasizes the importance of home charging for the adoption of electric vehicles, as it allows for cheaper overnight charging. The cost of using public fast chargers is significantly higher, potentially making electric car running costs more expensive than petrol cars. The falling price of oil has also made conventional cars more competitive.
Government Policies and Consumer Resistance
The UK government is strongly committed to pure electric vehicles, partly due to significant investments in new battery facilities. However, there is customer resistance to battery electric vehicles, with a segment of the car-buying public refusing to buy them regardless of their features. The video suggests that forcing electric vehicles onto consumers who do not want them is counterproductive.
Sales Data and Premium Car Market
The electric cars that are selling well are typically smaller and cheaper models, which are often used as second cars. However, these are not the cars that manufacturers and dealers make the most profit on. The premium car market is struggling with electric vehicles, leading to the popularity of plug-in hybrids as a solution for buyers who want cheap running costs and unlimited range.
Consumer Psychology and Range Anxiety
The video touches on consumer psychology, noting that people often desire more capacity or range than they actually need. Even if a range of 250-300 miles is sufficient, consumers often want a range of 800 miles. Plug-in hybrids and range extenders can address this "range anxiety" and provide a more appealing solution for many buyers.
Turmoil in the Car Market and Future Outlook
The video concludes by highlighting the turmoil in the car market and the standoff between consumers and manufacturers. Governments need to address the situation to avoid the collapse of the motor industry. Even with the continued use of internal combustion engines and plug-in hybrids, meeting EU regulations will be challenging. The regulations may lead to the demise of the small car due to the cost of emission control technology.
Simplicity and Longevity of Cars
The video argues that simpler cars tend to have longer lifespans. The increasing complexity of modern cars, with emission control technology and advanced driver-assistance systems (ADAS), makes them more prone to failure and less sustainable. A 1970 Rolls-Royce, which is simple and runs on sustainable fuel, is presented as an example of an environmentally friendly car.
Achievability of Emission Targets and Conclusion
The video expresses doubt that electric vehicles will ever exceed 50% of total car sales, making the 80% target unviable and leading to massive fines for manufacturers. The 2035 ban on internal combustion engines is described as "manufacturing suicide" for Europe. The video suggests that adopting China's "new energy vehicle" model could lead to 80-90% adoption of NEVs by 2035, with a small segment of high-end internal combustion engine cars powered by sustainable fuels. The zero-emission mandate is considered "utter nonsense" and "utterly unachievable." The video concludes with hope that the lobbying efforts of manufacturers will lead to more flexible policies, although doubts remain about the UK's willingness to change course.
