Car industry: What’s the real cost of going electric?

Back in 1888, the electric car was all the rage. But the discovery of large petroleum reserves worldwide and the combustion engine quickly killed it off.

Electrification was very much the theme at this year’s Geneva Motor Show, but consumers are yet to be convinced. Of the 80 million cars expected to be sold this year, just two million will be electric. However, that’s not stopping the big carmakers from making the switch.

So what is the future of the automotive industry? What will it take to go electric? And what will be the real cost of it?

Economics editor Abid Ali caught up with Linda Jackson, the CEO of Citroen, at the Geneva Motor Show. He began by asking her if electric cars – which take fewer people to assemble – catch on, then what will that mean for jobs.

“I don’t know whether it’s the question of whether it’ll take less people to make the car, it’s about how many manufacturers will be able to afford to make the cars and how many of our customers will be able to buy our cars because electric cars do mean that potentially that’ll be an increase in price. So there’s very many factors playing in effect in terms of what the future is for the automotive industry.” 

China has the lead. Clearly, every manufacturer is trying to find ways to support the supply of batteries in the future because that's absolutely fundamental.

by Linda Jackson, CEO, Citroen

According to Jackson, an important consideration is “the infrastructure that we need to be able to run them and move about in our electric cars, so that’s another factor that’ll impact our society”.

“Customers aren’t reluctant to buy it, but they’re keen on making sure that they’re able to use their cars, charge their cars, to be able to charge them while they’re on the move – and that’s something that hasn’t really been considered, generally. Apart from that, everything will be able for customers but we have to realise that the cost of the batteries, etc will mean there’s increment for having an electric car, and I’m not sure all customers realise that there will be an increment.”

In terms of the availability of batteries, “China has the lead. Clearly, every manufacturer is trying to find ways to support the supply of batteries in the future because that’s absolutely fundamental … but China is in a very strong position and in terms of their own market, is moving very quickly towards electric and wanting to encourage electric, obviously on the back of the fact that they’re the major battery supplier,” says Jackson.

“Clearly it’s a major concern and question for all manufacturers to be able to find solutions and ensure that we have the continued supply of batteries in the future.”

Also on this episode of Counting the Cost:

Silatech: Five million young people will be entering the job market every year for the next five years in the Middle East. One organisation, Silatech is leading efforts to connect young men and women with jobs. Counting the Cost spoke with the founder and chairwoman of Silatech, Sheikha Moza bint Nasser, on her new efforts in job creation.

Power outages in South Africa: In many parts of the world, reliable electricity supply is still a problem. In South Africa, rolling blackouts are impacting many businesses’ ability to operate. State-owned Eskom is one of the biggest power utilities in the world, but it’s technically insolvent, and its crisis is putting livelihoods at risk. Malcolm Webb reports from Johannesburg.

Huawei: Huawei Technologies, China’s telecommunications giant, said that it filed a lawsuit against the United States for banning government agencies, employees and contractors from using Huawei equipment as the company attempts to fight back against perceptions that it is a tool used for spying by Beijing. Adrian Brown reports from Shenzhen, where Huawei has its headquarters.

Portugal Eurotown: British citizens living in the European Union are waiting anxiously to see what decision their government and Parliament in London are about to make over Brexit. Laurence Lee reports from the Spanish town of Ayamonte which sits on the country’s southern border with Portugal.