Quick facts
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The Mayor of London’s office is aiming to have 80% of all trips in London be made on foot, by cycle or using public transport by 2041
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of consumers are looking to switch their vehicles based on connectivity features, according to research quoted by Sabine Thibault-Liger at the conference
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China is seeking to establish nearly 5 million charging outlets and stations by 2020
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China is seeking to produce 2 million pure and hybrid EVs by 2020
Linklaters was proud to sponsor the FT Future of the Car Summit, which took place in London in May 2019. The Summit was a meeting of over 500 of the automotive industry’s leading experts, innovators and thought leaders who discussed a wide range of the biggest issues affecting the industry.
We have summarised some of our key takeaways from the event below, which can be grouped under three big themes:
Electric cars
1. The vital importance of battery supply
Securing battery supply is a vital component of the EV business model, and China currently has most of the world’s battery production capacity according to Linklaters research. The importance of battery supply is underlined by one of the announcements at the conference: Volvo announcing supply deals with China’s CATL and Korea’s LG Chem where the capacity ordered was “more or less the same amount of batteries as the whole of the global supply last year”.
2. The role of regulation in driving
Regulatory carrots and sticks will be key to driving market take-up, alongside affordability and educating the market. Regulations will range from the regional (e.g. EU’s aim to reduce new car CO2 emissions by 37.5% by 2030) down to the local (e.g. London’s ULEZ).
3. There are centres of importance for EVs in Europe as well
While China and California may have the volume, it turns out that Norway is the world’s leader in proportion of EV sales vs ICE sales. Ralf Speth of JLR spoke about EV sales being the majority of car sales in Norway this year.
4. The battery recycling opportunity
Recycling the EV battery is a vital part of the process: failing to recycle the battery appropriately could do more environmental harm than the emissions saved by the battery. Moreover, EV batteries may retain significant value after their in-car use, according to forthcoming Linklaters research.
5. Range is still key
Many of the participants spoke about the importance of extending range. Recent research shows, for example, that 90% of UK customers would consider an EV if range rose to 480km/300miles.
Autonomous vehicles & connectivity
6. The complexities of shadow mode
Shadow mode - a system working passively in the background that uses recorded data and input from sensors and cameras in the car to make its own hypothetical driving decisions – is a necessary stepping stone for the development of AVs. But breaching GDPR requirements on data handling can result in ruinous penalties – and merely seeking “consent” from the car owner will not be enough to meet the requirements.
7. The challenges of developing technology
Many speakers spoke about the importance of sophisticated and accessible software for AVs and EVs. Cracking software problems in the automotive space is a transition not only for OEMs but also for tech companies. How they collaborate and compete in order to meet this challenge will not only create new business models but will also drive M&A, capital markets and employment trends.
Connecting stakeholders across regions and industries
8. U.S. auto trade inbound investment scrutiny
Investment in US tech or automotive businesses may be increasingly scrutinised by CFIUS, given recent moves by the Trump administration to extend and tighten the screening of foreign investment into the US. CFIUS clearance will be increasingly part of the playbook for foreign entities considering investment into the US – and is more of an advocacy process than a basic regulatory filing.
9. The China opportunity continues to grow
China’s new Foreign Investment Law, along with its updated Negative List of sectors restricted to foreign investors, gives a clear path to liberalisation for its automotive sector along with assurances to foreign investors on IP protection and equal treatment.
10. Collaboration is increasingly necessary - and increasingly complex
A vast array of stakeholders: automotive businesses, technology companies, governments, regulators, journalists, infrastructure providers, and many others as well as consumers themselves – will need to work together in order to unlock the potential of the car of the future. We are proud to support forums such as the FT Future Of The Car Summit in order to help make this happen.
Key contacts
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