The State of the Electric Vehicle Revolution 2023

Global

Semiconductors control a wide range&nbsp;of EV features from the engine to infotainment systems.

However, a combination&nbsp;of increased demand for consumer&nbsp;electronics during the pandemic,&nbsp;semiconductor chip manufacturing&nbsp;slowdowns due to US-China trade&nbsp;tensions, and supply chain disruptions&nbsp;have limited supply of these chips&nbsp;recently.

The shortage of semiconductor chips have resulted in the EU&rsquo;s Chip Act, which is the European Commission&rsquo;s ambitious US&nbsp;$47.5 billion proposal to help produce 20% of the world&rsquo;s semiconductors by 2030.

Numerous semiconductor companies have&nbsp;already announced new chip production facilities across Europe.

Germany has also prepared a US $22 billion fund to support the&nbsp;development of its own local production in the coming years.

Automotive Semiconductor Average Lead Time Index Shows the Waiting Time During the Semiconductor Shortage

Infobytes

There is no doubt that more and more&nbsp;individuals around the world are making&nbsp;the switch to drive electric cars.

But&nbsp;in each market, EV manufacturers face&nbsp;different concerns from customers,&nbsp;which directly relate to that country&rsquo;s&nbsp;appetite towards switching to electric&nbsp;vehicles.

For example, Chinese consumers have the greatest appetite for EVs; while Japanese consumers have the greatest distaste for combustion engine vehicles.

Engine Preference for Next Vehicle in Every Country is Different, Influencing the Uptake of EVs

Engine Preference for Next Vehicle in Different Countries

The VC Winter came a bit later to Africa because of its relatively smaller deal sizes attracting investment late into the 2022; but... brrrrr... 2023 data tells a story of a dramatic downturn. Historically, African VC deals have been 50%+ focused on lower growth stage deals. But in 2023, VC deals on the Mother Continent have focused more on later stage investments, backing incumbents in major tech sectors. As inflationary pressures and the US treasury interest rate hikes continued into the Summer of 2023, the world is starting to acutely feel the pinch of the higher cost of capital.

When we spoke to Investors for their insights, they explained that because most VCs across the world raise funds in US dollars, they need to hedge foreign currency risk by going and investing in markets where foreign currency is more stable. This leaves African economies (and many other emerging markets) particularly vulnerable, as their currencies weaken against the US dollar. Lucidity Insights research shows that much of the domestic African capital is having to do the same, whether they are HNWI angel investors or African funds.

Automotive Semiconductor Average Lead Time Index

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