While many of us in communities that haven’t been hit by the coronavirus may not feel directly affected, the economic impact of this outbreak is undeniable. Production delays due to the virus in South Korea could have contributed to Audi’s stalled production of the e-tron. Now, after a confirmed case of the virus in Switzerland, the Geneva motor show has been canceled. What effects will the coronavirus have on the electric car industry?

Disclaimer: I want to be clear that I am a car journalist, not a doctor. This article is an analysis of the effects of the coronavirus(COVID-19) on the electric vehicle industry. For relevant health information regarding the coronavirus we recommend you consult the CDC’s website.

The show must go on(line)

We were expecting many EV announcements this week, and the closing of the Geneva motor show won’t stop that. We’ve got a great look online at the Audi e-tron S, their triple motor performance variant of the e-tron.

Dynamic photo

BMW is also going to be holding a “digital press conference” tomorrow to unveil the hotly anticipated BMW i4.

And that’s just the tip of the iceberg. We are expecting more announcements from the performance-oriented Polestar to new plug-in hybrids from Mercedes-Benz. We’ll go more in-depth on some of these announcements over this week.

This situation will certainly hurt the wallets of those running the Geneva motor show. Those who planned to attend the show will have their tickets refunded. This must have been a tough decision for the show’s organizers. But they had little choice but to shut down with little warning after a case of the virus was confirmed in Switzerland on February 28th. While major events like this getting canceled sucks for everyone involved, this is a necessary measure to prevent the spread of the infection.

We regret this situation, but the health of all participants is our and our exhibitors’ top priority. This is a case of force majeure and a tremendous loss for the manufacturers who have invested massively in their presence in Geneva. However, we are convinced that they will understand this decision.

Maurice Turrettini, Chairman of the Foundation Board

What impact will this have?

The 2020 Geneva motor show being canceled is ultimately inconsequential. Manufacturers may lose some hype for their upcoming offerings. Though the highly publicized nature of the situation may actually end up giving them a signal boost in the end.

The real problem here is the effect the coronavirus has had on global manufacturing. While I haven’t been able to find any official statements, I believe factory shutdowns in South Korea can be blamed for battery shortages from South Korean battery supplier LG Chem. Workers in Tesla’s Shanghai Gigafactory have been forced to work wearing masks, and production has slowed.

But companies outside of affected areas will still be hit by the effects of the coronavirus. Automotive manufacturing is a global industry. And China controls the majority of the world’s battery manufacturing.

Automotive manufacturing is a global industry

Dana Inc. CEO Jim Kamsickas spoke with the AP about the issues this stall in global manufacturing can have.

Only 5% of our business is in China. The larger issue for ourselves and a lot of other parts suppliers and OEMs is the global supply chain.

Dana Inc. CEO Jim Kamsickas

But he did clarify that things aren’t too grim. These large manufacturers plan for things like this. They keep buffer inventory on hand and they have backup plans. While this outbreak might set some companies back, they should be able to weather this storm.

All in, I think everybody’s finding a way to navigate through it. I look back on my 30-plus year career in the mobility parts business, the OEMs in particular, but also the tier ones (larger parts companies) such as Dana have gotten so sophisticated in terms of contingency planning, coming up with solutions. In the whole scheme of things, given what’s going on, you’d have a lot bigger issues if people didn’t have advance planning. There are backup plans. I’m not saying it’s going to be perfect, but I’m pretty optimistic that people are finding a way.

Dana Inc. CEO Jim Kamsickas

Who will lose out?

While most companies will be able to weather this storm, some will do better than others. I think more vertically integrated companies will have a massive advantage in 2020. Even companies who don’t source batteries from China or South Korea will be affected. With such a major disruption of global battery availability prices will go up.

But companies like Tesla and GM who’ve forged strong partnerships with battery manufacturers should be fine. Tesla’s attempts to penetrate the Chinese EV market will be slowed, but their US manufacturing shouldn’t be affected. With Tesla already holding a staggering lead in the US market, this battery scarcity is a massive blow to those affected by these battery shortages.

The only manufacturer who will be able to stand up to Tesla in 2020 is GM. But GM is currently lacking in their EV offerings. The new Hummer EV isn’t coming until this fall and Cadillac’s new crossover EV isn’t coming until next year. That leaves us with just the poorly selling Chevy Bolt. So while GM seems to have a big advantage in 2020, they lack the ability to capitalize on that advantage. It’s like they have a hammer without any nails.

As for the effect on the international EV market, I’m more uncertain. Factory shutdowns in China could send the Chinese EV market into freefall. But given the massive investment into Chinese EV startups over the past few years, I don’t know if they’re ready to give up anytime soon. And with slowed production in the Shanghai Gigafactory, Tesla won’t be able to take over China just yet. But the one thing I do know is that EV sales in China will be hurt greatly in 2020.

Our take

With the Model Y starting to ship out, 2020 is going to be a very strong year for Tesla, at least in North America. Audi has shown that global battery shortages are going to be a difficult problem to overcome in the face of a global epidemic. We can only guess which manufacturer will be hurt next.

We hope you enjoyed reading our take on the effect of the coronavirus on the EV industry! Let us know your thoughts in the comments down below. And make sure to follow our social media up top for all the new updates on what’s happening in the EV world! We’ll be following up with all the new announcements coming this week, so stay tuned!

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