Europe Accuses China of Using Strategies Once Employed by Its Own Automotive Industry for Growth
The Future Still Belongs to Electric Transition.
The electric transition process has recently lost momentum, and we are still at the beginning of this entire process, said Szabolcs Pásztor in an interview with Világgazdaság. The Conversation delved into the challenges of electrification with the Research Director of the Oeconomus Economic Research Foundation and docent at the National University of Public Service, especially highlighting the stagnant progress in recent months. He mentioned that electric vehicles have not yet embarked on the traditional path that innovations typically follow.
"There is something not quite right in the auto market," said Márton Nagy, the Minister of Economic Affairs, after discussions on the automotive industry's situation in Germany. This comment came around the time of German Chancellor Olaf Scholz's visit to China, where automotive issues were also a prime focus. So, what is the actual problem with vehicle manufacturing?
Clearly, the major challenge for the automotive industry is the transition to electric vehicles, a major and defining innovation, which, despite its importance, seems to be marred by high costs and a lack of traditional innovation lifecycle. Recent reports suggest a slowdown in automotive sales, reflecting the challenges of introducing a new innovation that demands significant investments in research and development, employing technology and materials not widely accessible.
It is crucial to remember that the coverage of electric charging networks in Europe cannot be compared to that of gas stations. Additionally, regulatory frameworks are still developing. Despite available government incentives, the complexity and accessibility issues of these incentives hinder the innovation's growth. "The news that the electric transition is not as dynamic as expected is not surprising to me," Pásztor remarked.
Electric Vehicles: Despite Current Challenges, They Represent the Future
Where does this innovation stand now? Factors such as changes in transportation routes, rising raw material costs, and the immaturity of technology are significantly burdening the process. However, this is subject to change. Pásztor often cites the drastic reduction in the cost of aluminum since the 1850s as an analogy, suggesting a similar transformative shift could occur in electric vehicle technology and industry, eventually overcoming the current limitations.
Is this the future of the global economy? "I believe so," Pásztor answers, emphasizing the current reliance on available knowledge and technologies to navigate towards the future. Despite the potential valleys, the evolution of electric vehicles is expected to continue advancing, diverging from the conventional path of innovations. The focus should remain on the broader picture.
By 2035, internal combustion engines are to be phased out, leaving slightly more than a decade for this transition. This timeline serves as a message for prospective car buyers about their choices and hints at a gradual phase-out of traditional vehicles. It suggests a shift in consumer preferences towards more modern technologies, likened to the transition from black-and-white to color televisions, potentially sparking a self-sustaining process.
European manufacturers have arguably fallen behind in the electric transition compared to American and Chinese firms, with the latter benefiting from significant state support, leading to more competitively priced Chinese electric vehicles. This situation puts European automakers in a difficult position, as they struggle to compete without compromising on quality and damaging their brands. The lack of sufficient state support and efforts to maintain competitiveness in the automotive industry poses a significant challenge to Europe, potentially jeopardizing its own interests.
Regarding punitive tariffs against China, Pásztor suggests avoiding a tariff war, advocating instead for Europe to achieve or maintain a technological advantage. The current electric vehicle technology, while not yet mature or universally suitable, shows promise for future developments. As for the ongoing debates around battery factories and their perceived low added value, it's crucial for Hungary, like Southeast Asian countries previously, to aim for continuous advancement in producing higher added value goods.
The developments associated with the electric transition are a step forward, even if some may doubt their immediate impact. The key is to continuously strive for higher levels of achievement, especially in leveraging green energy for the future.
Translation:
Translated by AI
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