Connect with us

Reports

Electric car sales this year resist Covid-19’s blow to global car market

Published

on

The number of electric cars on the road is expected to reach almost 10 million this year, as sales grow this year despite the Covid-19 pandemic, according to a new report by International Energy Agency.

Electric car sales are expected to fare better than the overall passenger car market, with EV sales this year to broadly match the 2.1 million sold in 2019, according to the latest edition of the IEA’s Global EV Outlook. This would account for a record 3% of the total global car sales. Based on data from January to April this year, total global passenger car sales this year are set to decline by 15%.

The Covid-19 pandemic will affect global vehicle markets, and how governments respond to the pandemic will influence the pace of the transition to electric vehicles.

Global electric car sales grew by at least 30 percent every year over the past decade except for 2019, when growth slowed down to 6% as the regulatory environment changed in China and passenger car sales contracted in major markets. Even so, electric cars had another banner year in 2019, securing their highest ever share – 2.6% – of the global car market.

Last year, electric vehicles performed differently in markets worldwide. China remained by far the largest electric car market in the world, accounting for half sold in 2019. More than 1 million electric cars were sold in China in 2019, a 2% decrease from the previous year. Europe was the second largest market, with 561,000 cars sold in 2019. The United States followed with 327,000 cars sold.

Electric cars are expected to account for nearly 1% of the global car stock with this year’s sales. However, the report explains that second waves of the pandemic and slower-than-expected economic recovery could lead to different outcomes. Ultimately, government responses to the pandemic and how consumers emerge from the crisis will determine what happens to electric car markets in 2020 and beyond. 

Electric vehicles play a critical role in meeting the environmental goals of the IEA’s Sustainable Development Scenario to reduce local air pollution and to address climate change. In 2019, all electric vehicles combined avoided the consumption of almost 0.6 million barrels of oil products per day globally. Also, electricity generation to supply the global electric vehicle fleet emitted about half the amount that would have been emitted from an equivalent fleet of internal combustion engine vehicles.

In the Sustainable Development Scenario, the global electric vehicle stock (excluding two/three-wheelers) grows by 36% annually, reaching 245 million vehicles in 2030 – more than 30 times above today’s level. In 2030, electric vehicles reduce GHG emissions by almost half compared to an equivalent fleet of internal combustion engine vehicles in the Stated Policies Scenario and by two-thirds in the Sustainable Development Scenario.

Global EV Outlook, the flagship publication of the Electric Vehicles Initiative (EVI), combines historical analysis with projections to 2030, providing key insights on electric vehicle and charging infrastructure deployment, ownership cost, energy use, carbon dioxide emissions and battery material demand. This year’s edition analyses the development of the global EV market and the impact of Covid-19, recent policy developments from around the world, EV projections for 2030, the technology and environmental performance of batteries and potential roles of EVs in power systems.

Continue Reading
Comments

Reports

Renewable Energy Jobs Reach 12 Million Globally

Published

on

Renewable energy employment worldwide reached 12 million last year, up from 11.5 million in 2019, according to the eighth edition of Renewable Energy and Jobs: Annual Review 2021. The report was released by the International Renewable Energy Agency (IRENA) in collaboration with the International Labour Organization (ILO) at a high-level opening of IRENA’s Collaborative Framework on Just and Inclusive Transitions, co-facilitated by the United States and South Africa.

The report confirms that COVID-19 caused delays and supply chain disruptions, with impacts on jobs varying by country and end use, and among segments of the value chain. While solar and wind jobs continued leading global employment growth in the renewable energies sector, accounting for a total of  4 million and 1.25 million jobs respectively, liquid biofuels employment decreased as demand for transport fuels fell. Off-grid solar lighting sales suffered, but companies were able to limit job losses.

China commanded a 39% share of renewable energy jobs worldwide in 2020, followed by Brazil, India, the United States, and members of the European Union. Many other countries are also creating jobs in renewables. Among them are Viet Nam and Malaysia, key solar PV exporters; Indonesia and Colombia, with large agricultural supply chains for biofuels; and Mexico and the Russian Federation, where wind power is growing. In Sub-Saharan Africa, solar jobs are expanding in diverse countries like Nigeria, Togo, and South Africa.

“Renewable energy’s ability to create jobs and meet climate goals is beyond doubt. With COP26 in front of us, governments must raise their ambition to reach net zero,” says Francesco la Camera, IRENA Director-General. “The only path forward is to increase investments in a just and inclusive transition, reaping the full socioeconomic benefits along the way.”

“The potential for renewable energies to generate decent work is a clear indication that we do not have to choose between environmental sustainability on the one hand, and employment creation on the other. The two can go hand-in-hand,” said ILO Director-General, Guy Ryder.

Recognising that women suffered more from the pandemic because they tend to work in sectors more vulnerable to economic shocks, the report highlights the importance of a just transition and decent jobs for all, ensuring that jobs pay a living wage, workplaces are safe, and rights at work are respected. A just transition requires a workforce that is diverse – with equal chances for women and men, and with career paths open to youth, minorities, and marginalised groups. International Labour Standards and collective bargaining arrangements are crucial in this context.

Fulfilling the renewable energy jobs potential will depend on ambitious policies to drive the energy transition in coming decades. In addition to deployment, enabling, and integrating policies for the sector itself, there is a need to overcome structural barriers in the wider economy and minimise potential misalignments between job losses and gains during the transition.

Indeed, IRENA and ILO’s work finds that more jobs will be gained by the energy transition than lost. An ILO global sustainability scenario to 2030 estimates that the 24-25 million new jobs will far surpass losses of between six and seven million jobs. Some five million of the workers who lose their jobs will be able to find new jobs in the same occupation in another industry. IRENA’sWorld Energy Transition Outlook forecasts that the renewable energy sector could employ 43 million by 2050.

The disruption to cross-border supplies caused by COVID-19 restrictions has highlighted the important role of domestic value chains. Strengthening them will facilitate local job creation and income generation, by leveraging existing and new economic activities. IRENA’s work on leveraging local supply chains offers insights into the types of jobs needed to support the transition by technology, segment of the value chain, educational and occupational requirements.

This will require industrial policies to form viable supply chains; education and training strategies to create a skilled workforce; active labour market measures to provide adequate employment services; retraining and recertification together with social protection to assist workers and communities dependent on fossil fuels; and public investment strategies to support regional economic development and diversification.

Read full report

Continue Reading

Reports

In highly uneven recovery, global investment flows rebound

Published

on

After a big drop last year caused by the COVID-19 pandemic, global foreign direct investment (FDI) reached an estimated $852 billion in the first half of 2021, showing a stronger than expected rebound.  

That’s according to the latest Investment Trends Monitor, released this Tuesday by the United Nations Conference on Trade and Development (UNCTAD).  

It shows the increase in the first two quarters in FDI, recovered more than 70 per cent of the losses stemming from the COVID-19 crisis in 2020. 

For the UNCTAD‘s director of investment and enterprise, James Zhan, the good news “masks the growing divergence in FDI flows between developed and developing economies, as well as the lag in a broad-based recovery of the greenfield investment in productive capacity.” 

Mr. Zhan also warns that “uncertainties remain abundant”. 

Global outlook  

The duration of the health crisis, the pace of vaccinations, especially in developing countries, and the speed of implementation of infrastructure stimulus, remain important factors of uncertainty. 

Other important risk factors are labour and supply chain bottlenecks, rising energy prices and inflationary pressures.  

Despite these challenges, the global outlook for the full year has improved from earlier projections. 

The growth in the next few months should be more muted than the in the first half of the year, but it should still take FDI flows to beyond pre-pandemic levels. 

Uneven recovery 

Between January and June, developed economies saw the biggest rise, with FDI reaching an estimated $424 billion, more than three times the exceptionally low level in 2020. 

In Europe, several large economies saw sizeable increases, on average remaining only 5 per cent below pre-pandemic quarterly levels.  

Inflows in the United States were up by 90 per cent, driven by a surge in cross-border mergers and acquisitions. 

FDI flows in developing economies also increased significantly, totalling $427 billion in the first half of the year.  

There was a growth acceleration in east and southeast Asia (25 per cent), a recovery to near pre-pandemic levels in Central and South America, and upticks in several other regional economies across Africa and West and Central Asia. 

Of the total recovery increase, 75 per cent was recorded in developed economies. 

High-income countries more than doubled quarterly FDI inflows from rock bottom 2020 levels, middle-income economies saw a 30 per cent increase, and low-income economies a further nine per cent decline.  

Mixed picture for investors 

Growing investor confidence is most apparent in infrastructure, boosted by favourable long-term financing conditions, recovery stimulus packages and overseas investment programmes. 

International project finance deals were up 32 per cent in number, and 74 per cent in value terms. Sizeable increases happened in most high-income regions and in Asia and South America. 

In contrast, UNCTAD says investor confidence in industry and value chains remains shaky. Greenfield investment project announcements continued their downward path, decreasing 13 per cent in number and 11 per cent in value until the end of September.  

Agenda 2030 

After suffering double-digit declines across almost all sectors, the recovery in areas relevant to Sustainable Development Goals (SDGs) in developing countries remains fragile. 

The combined value of announced greenfield investments and project finance deals rose by 60 per cent, but mostly because of a small number of very large deals in the power sector.  

International project finance in renewable energy and utilities continues to be the strongest growth sector. 

The investment in projects relevant to the SDGs in least developed countries continued to decline precipitously. New greenfield project announcements fell by 51 per cent, and infrastructure project finance deals by 47 per cent. Both had already fallen 28 per cent last year.

Continue Reading

Reports

Capabilities fit is a winning formula for M&A: PwC’s “Doing the right deals” study

Published

on

city business

Ensuring there is a capabilities fit between buyer and target is key to delivering a high-performing deal, according to a new PwC study of 800 corporate acquisitions. . The study finds that capabilities-driven deals generated a significant annual total shareholder return (TSR) premium (equal to 14.2% points) over deals lacking a capabilities fit.

The “Doing the right deals” study looks at the 50 largest deals with publicly-listed buyers in each of 16 industries and evaluates the characteristics that delivered superior financial outcomes for the buyers, as measured by annual TSR.

A capability is defined as the specific combination of processes, tools, technologies, skills, and behaviours that allows the company to deliver unique value to its customers.

Two types of deals were found to outperform the market: capabilities enhancement deals – in which the buyer acquires a target for a capability it needs — and capabilities leverage deals – in which the buyer uses its capabilities to generate value from the target. These represent a true engine of value creation, delivering average annual TSR that was 3.3% points above local market indices. Deals without these characteristics – limited-fit deals – had an average annual TSR of -10.9% points compared to the local market indices.

While 73% of the largest 800 deals analysed sought to combine businesses that did fit from a capabilities perspective, 27% were limited-fit deals. The analysis shows that for every dollar spent on M&A, roughly 25 cents were spent on such limited-fit deals that in many cases destroyed shareholder value.

Alastair Rimmer, Global Deals Strategy Leader, PwC UK said: “Our analysis confirms that deals where the buyer is focused on enhancing its own capabilities or leveraging its capabilities to improve the target can result in a substantial TSR premium. Whether a deal creates value depends less on whether it is aimed at consolidation, diversification or entering new markets. What matters is whether there is a solid capabilities rationale between the buyer and the target.”

Capabilities fit delivers shareholder value across industries

The capabilities premium was found to be positive across all of the 16 industries studied. The share of capabilities-driven deals was highest in pharma & life sciences (92%), an industry where deals often combine one company’s innovation capabilities with another’s strength in distribution.  Other leading industries in capabilities fit deals were health services and telecommunications (both with 90% capabilities-driven deals) and automotive (86%).  Limited fit deals were found to be most prevalent in the oil & gas industry (62%), where asset acquisition can play an important role in addition to capabilities fit.

The analysis shows that the stated strategic intent of a deal, as defined in corporate announcements and regulatory filings, has little to no impact on value creation. Whether a deal fits or not depends less on stated goals of consolidation, diversification or entering new markets. What matters is whether there is a capabilities fit between the buyer and the target.  Deals aiming for geographic expansion notably stood out as performing less well than others, largely because many of them (34%) were limited-fit deals.

The M&A playing field has shifted due to COVID-19

More than ever, companies must be clear in defining which capabilities they can leverage to succeed, and which capabilities gaps they need to fill.

Hein Marais, Global Value Creation Leader, PwC UK added: “Deal rationales have shifted in a COVID context, reflecting the heightened need for new and different capabilities if an enterprise is to generate value and create sustained outcomes.  The need to move quickly increases the pressure to do deals at pace – and thereby the risk of failing to evaluate capabilities fit with enough care. Ensuring such capabilities fit, however, dramatically increases the chances of your deal creating value.”

Continue Reading

Publications

Latest

Economy1 hour ago

United World of Job Seekers and Job Creators Will Boost Recovery

Why is there so much disconnect between entrepreneurial thinking and bureaucratic thinking? Has the world of education, certification, occupation divided...

International Law3 hours ago

Debunking the Sovereignty: From Foucault to Agamben

“Citing the end of Volume I of The History of Sexuality, Agamben notes that for Foucault, the “threshold of modernity”...

South Asia9 hours ago

Did India invade Kashmir?

Pakistan has decided to observe 27th October as Black Day. This was the day when, according to India’s version, it...

Environment11 hours ago

Landmark decision gives legal teeth to protect environmental defenders

A 46-strong group of countries across the wider European region has agreed to establish a new legally binding mechanism that...

Environment13 hours ago

Plastic pollution on course to double by 2030

Plastic pollution in oceans and other bodies of water continues to grow sharply and could more than double by 2030, according to an assessment released on Thursday by the UN Environment...

Americas15 hours ago

Global Warming And COP26: Issues And Politics

The president’s massive social services and infrastructure package is under consideration by Congress.  The problem is Senator Joe Manchin, a...

International Law17 hours ago

The End of the West in Self-annihilation (Intentionality, Directionality and Outcome)

A state of complete physical, mental and social well-being and not merely the absence of disease or infirmity.-Definition of Health,...

Trending