Car: How the pandemic affected the car industry

The COVID-19 epidemic has had a significant impact on the operation of many important sectors of the global economy, including the automotive industry. The increase in the delivery period of new cars, the slowdown in production, the shortage of raw materials and the increase in car prices are key issues in the industry.

The size of the people involved in the automobile is huge and the economy that is created around it plays an important role in the GDP of many countries. The global car industry employs 14 million people in Europe alone, another 8 million in the US and 5 million in China. The economy is structured in such a way that multiple people are employed and active in the various stages of production, sale, maintenance and transportation of parts and spare parts around the car.

Restrictions due to the pandemic have resulted in the closure of several factories, significant delays in deliveries and financial losses to many companies that have hitherto been financially sound. The car industry in the UK, for example, has shrunk by up to 29% in just one year, while according to some analyzes, the car market in Europe will take many years to reach the size of 2019.

In contrast, China’s auto industry suffered smaller losses, producing 48.9 cars per minute. In the United States the production rate is 20.7 cars and in Germany 8.9 cars. Therefore, the main challenge for the coming years will be to reorganize production, as the pandemic has left a deeper mark on consumer expectations and behavior.

The most obvious effect of the pandemic on the big cities was the massive shift from public transportation to private car, motorcycle or bicycle. This is not surprising, as the use of individual means of transport poses a much lower risk of infection. According to McKinsey estimates, micro-mobility is a very growing trend for the global automotive industry, which will continue to grow in the coming years.

In relation to the problem of increasing traffic and CO2 emission levels in urban areas, a major challenge in the post-coronavirus era is the expansion of the electric car charging network. According to the European Commission estimates, the goal of reducing CO2 emissions by 50% by 2030 is achievable if there are around 6 million charging points throughout the European Union. There are currently less than 225,000 charging points, with 70% of the points located in just three countries. The Netherlands, France and Germany.

Taking into account the latest data on the progress made by the countries participating in the “European Green Agreement”, the average level of emissions produced by new passenger cars registered in the European Union should be reduced by 37.5% by 2030 , compared to 2021. This means that new measures need to be reviewed and implemented to accelerate the shift to electricity, such as the creation of a new, ecological biofuel that will help reduce pollution (such as what can be produced from algae).

Finally, we should not overlook the effort of the car manufacturers to increase the capacity of batteries, reduce the price of electric cars, but also reduce their total weight. The latter factor will result in the reduction of pollutant emissions and the increase of autonomy. In this way, electric cars will become more affordable and will be harmonized with modern logic, which requires greater respect for all to the environment.

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