Political instability in the US and Europe hinders the global advance of electric cars

Political instability and a lack of clarity in government rules have become the biggest obstacles to the global transition to electric vehicles. The warning was given by executives and economists during the World Economic Forum in Davos, Switzerland. The consensus is that, without predictability, it becomes unfeasible for automakers to plan complex supply chains and long-term billionaire investments.

The panel highlighted that the regulatory “musical chairs” in the West contrasts with the Asian consistency, creating a scenario of legal uncertainty that curbs mass production.

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The cost of uncertainty

Stella Li, executive vice president of BYD, was categorical in pointing to the oscillation of national policies as the main bottleneck for the injection of capital. For the executive, the automotive industry operates in long cycles and needs perennial guidelines. China’s success, according to the analysis in Davos, is due precisely to years of consistent state policies, which allowed the development of a robust charging infrastructure and the cheapening of the technology.

In the West, the scenario is the opposite. In Europe, the discussion about postponing or revising the ban on combustion engines (initially scheduled for 2035) raises doubts among manufacturers. In the United States, the alternation of power and the rhetoric against green subsidies in Republican administrations, such as that of Donald Trump, discourage industrial planning.

Elaine Buckberg, former chief economist at General Motors and researcher at Harvard University, reinforced that predictable incentives are the backbone of the energy transition. “Companies need to know what the rules of the game will be in five or ten years,” he argued.