An Analysis of Electric Vehicles in Europe: Business Environment Essay

This essay provides an in-depth analysis of the electric vehicle (EV) market in Europe. It begins with an overview of the automotive industry's evolution, highlighting the increasing demand for EVs due to rising environmental concerns and changing consumer preferences. The main body utilizes PESTLE and Porter's Five Forces models to examine the forces shaping the business environment, including political, economic, socio-cultural, technological, environmental, and legal factors, as well as the competitive landscape. The essay also explores future trends, such as the shift towards electric and driverless vehicles, and the reasons behind the drive towards EV production, including environmental benefits, energy security, and reduced noise pollution. Furthermore, the essay discusses emerging business opportunities for entrepreneurs and executives in the EV sector, spanning production, marketing, and related services such as battery recycling. Overall, the essay provides a comprehensive understanding of the EV market dynamics and its potential for growth in Europe.

ESSAY ON ELECTRIC
VEHICLES IN EUROPE

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Overview......................................................................................................................................1
Forces shaping business environment of car manufacturing industry.........................................1
Changes that may take place in the future and reason for such changes.....................................4
Reason due to which there is a drive towards the production of electric cars.............................4
New emerging business opportunities for entrepreneurs and business executives for production
and marketing of electric cars......................................................................................................5
Businesses linked to the automotive industry..............................................................................6
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Electrical vehicles are also known as EV, these are a kind of vehicles that uses electric
motors as a fuel for propulsion (Frankenberger and Stam, 2019). This essay will lay emphasis on
gearing up of electric vehicles, different forces shaping the business environment of car
manufactures, changes that has already taken place which is giving companies competitive
advantages and business opportunities of electric cars.
MAIN BODY
Overview
In last five years overall market of auto-mobile industry has successfully doubled.
Continuous changes and invention within this industry has brought both positive and negative
effect on this industry. As the disposable income of families is increasing there is rise in sales of
automotive vehicles. Due to this various changes has been brought within this industry which has
also helped in lowering the overall cost of vehicle. Today as per increasing demand of both two
and four wheelers, luxuriousness and overall affordability of cars is been focused and is
increased. Initially vehicles were made as per the demand and needs of the customers but today
they are made as per desire, requirement and luxuriousness of people (Colmenar-Santos and
et.al., 2019). Today more people are becoming environment friendly due to which many
companies in this industry are trying to bring innovation and produce low emission vehicles such
as electric vehicles as it is one of the most environment friendly vehicles that can be used by
customers.
Forces shaping business environment of car manufacturing industry
There are various factors due to which changes within this industry has occurred and has helped
in shaping this industry the way it is today. It can be explained with the help of PESTLE
analysis.
PESTLE Analysis of international environment factors at work in the industry
Environmental factors due to which changes occur in this automotive industry can be
explained with the help of PESTLE analysis. PESTLE analysis will show different ways
environmental factors can affect this industry:
Political: it is one of the main factor that has a direct impact on this industry. Most of the
governments today are supporting low emission vehicles and are making strict laws related to it.
Due to these laws demand for electric vehicles had increased. All the automotive companies
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need to adhere such rules and regulations and not only this all the vehicles that they produce
need to pass government rules. Due to this, taxes on importing or buying luxurious vehicles is
also increasing continuously. Every country has separate import/export laws which restricts
importing or exporting of vehicles.
Economical: it is also an important factor for this industry. It is one of the main industry which is
hit hard due to any kind of economic crises which directly impacts their vehicles sales and
overall work within their companies(Qiao and et. al., 2019). Due to this most of the companies
are trying to develop electric vehicles which will be in budget of their customers. Sales of
vehicles completely depend upon demand of vehicles and purchase power of customers. These
two are the main factors due to which economic factors affect this industry as companies in this
industry are heavily dependent upon demand and purchase power of their customers.
Socio-cultural: Changing customers preferences or social cultural trends also affect this industry.
Automotive companies need to adopt such changes and bring improvement within their products
continuously if they want to increase the overall sales of their vehicles. Another reason for these
changes is because taste and preference of people is also changing and as a result they are getting
diverted towards buying electric cars (Khaligh and D'Antonio, 2019). Auto mobile makes also
need to distribute their products and bring changes within them according to the age group of
customers it has been launched for. They should make changes as per their target customer
group.
Technological: It is one of the most important determinant of this industry which
directly/indirectly affects the overall market share of the companies. Research and development,
use of technology are important aspects of this industry. This advancement in technology has
also supported the evolution of electric cars. This has also increased competition for already
existing companies in this industry and more and more technology players are trying to enter into
this industry.
Environmental: Almost all the companies today are becoming environment friendly because of
which laws and legislation related to environment are becoming stronger and stronger. Laws for
low emission vehicles are improving due to which companies in this industry are forced to
improve their products quality so that low fuel consumption and low emission vehicles can be
produced. All the vehicles need to pass low emission test only after passing certain criteria
companies can launch their vehicles into the market.
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Legal: There are various laws that are affecting overall performance and sales of the vehicles
(Earl and Fell, 2019). Vehicles that are sold internationally, are subjected to various laws such as
product quality and safety laws. In order to maintain the overall quality of vehicles, make it
environment friendly companies are trying to manufacture electric cars. One of the most
important law that has grown stronger is pollution law. In order to control carbon emission all
the vehicles need to pass carbon emission law. Other than this there are various other laws such
as tax laws, environmental laws, import/export laws, international market laws etc.
Changes in this industry and its reasons can also be explained with the help of porters five force
model. This model will also help in the companies in this industry to analyse competitive
environment which can help companies to gain competitive advantage.
Porters five force model
It is one of the most common framework that can be used by companies to analyse
competitive market and attractiveness of the industry.
Threat of new entrant: It is a weak force with low threat (Fischer and et.al., 2019). New entrant
has the least impact on already established companies as it is extremely difficulty for them to
establish and develop their brand and its name. In order to develop brand it requires huge amount
of cost. Other than this it also requires huge investment in order to do business. Other than this, it
is extremely difficult of new entrants to enter into the market and sell electric cars. This is
because customers who prefer buying electric cars prefer already established brand to buy such
vehicles.
Bargaining power of buyers: It is a strong force with huge threat for automotive companies. This
is because the switching cost is quite low as there are many companies that manufactures and
sells electric cars due to which switching cost from one product to another decreases.
Threat of substitute products: it is a strong force with high amount of threat associated with it.
Low switching cost increases competition. Due to this low switching cost there is an increase in
substitute products. Many companies are focusing on manufacturing electric cars which is
eventually increasing number of substitute products available in the market (Nykvist, Sprei and
Nilsson, 2019). Other than this overall performance of all the other substitute products is also
same due to which it becomes a strong force.
Bargaining power of suppliers: It is a moderate force and threat associated with this threat
completely depends upon the number of suppliers a company has or size of their suppliers. This
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force is quite tricky to evaluate because threat associated with this force depends upon company
to company i.e. if a company is completely dependent upon one supplier then the threat
associated with suppliers is extremely high and if a company has many suppliers then threat
associated with it is quite low.
Intensity of competitive rivalry: it is also a moderate force as competition within this industry is
quite high but number of established competitors present within this industry are quite low. All
the established competitors offer similar but competitive prices to their customers
Changes that may take place in the future and reason for such changes
One of the main change that may take place in future is that there will be a shift from
petrol or diesel vehicles to gas or electric vehicles. More and more environment friendly vehicles
will be produced and more development will take place in future for development of electric cars
(de Rubens, 2019). Demand of electric vehicles will increase competition within the market in
this industry. In future driverless electric cars can be introduced that can be modified as per the
requirements of the customers. Other than this diesel or petrol cars can be banned in order to
reduce pollution.
Reason due to which there is a drive towards the production of electric cars
The global market of electric vehicle car has been increasing in recent year, there are 3.1
Million of car in the global world which are more than 50% in 2016. In Europe Market is still
dominated by the diesel vehicle but it has developed the electric car vehicles (Mounce and
Nelson, 2019). According to automobile association, the market shares of Europe approx. 2% in
2018 and 30 % higher in 2017.
In this way, of electric vehicle production has rapidly increasing in global world and
adopts the electric vehicles affected by government policies, consumer demand and government
incentives. Plug-in electric vehicles are divided into the multiple type of battery vehicle that only
run on batteries. It is combined with the battery power with the internal combustion engines.
There are some common reasons which drive towards the production of electric cars in Europe.
Better for environment
It is better option to choose electric vehicle which help for reducing harmful air pollution
from the emissions of toxic gases. It is the best source of renewable energy to recharge the
electric car through charging stations. Many consumers can use to recharge the car through solar
system during the say instead from grid.
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Another reason for using the eco-friendly materials that help for maintaining the level of
pollution which beneficial for increasing the demand and production of electric vehicle in EU. In
this way, many customers are preferred to buy the electric car because it is made of recycled
materials and its padding made of bio materials (Ziegler, 2019). It is also considered one of
advance technology that can help for EU to cut the toxic emission during the life cycle of
disposal, manufactures etc.
By using electric vehicle in EU, it has reduced the GHG emission level while it is main
substantial contributor to the climate change. In this way, it is necessary to control the rate of
emission which possible due to electric vehicle production in global markets. In this way, it has
been rapidly increasing the revolution of electric car in the marketplace (Pedada, Arunachalam
and Dass, 2019).
Electric vehicle helps in terms of energy security because Europe is dependent on the
other countries for the import of petroleum so that Electric vehicle are easy to use the renewable
energy resources. It will increase the opportunities of other start-up business to establish in
global market such as branding and spraying, recycling and refurbishing of batteries etc.
Another reason to use electric vehicle in EU for reducing the noise level especially at
lower speed, when it can produce the minimum noise. Generally Electric car have lower noise
pollution which depends on the proportion of overall vehicles fleet and also consider the
significant, it helps to control the noise level and become less harmful for people.
New emerging business opportunities for entrepreneurs and business executives for production
and marketing of electric cars
A Smart entrepreneurs and business executives are beginning the position themselves to take
benefits and advantage for emerging the global market. They have started for planning the
strategies and structure that will help for developing the organization (Crane, Matten and Spence,
2019). Smart Electric car is one of good option to increase the enterprises opportunities which
available in the automotive industry. For Example- It is much cheaper to start the electric car
wash enterprises but it is expensive to set up the manufacturing business of electric vehicle.
Business Opportunities
Electric vehicle charging station is considered the most popular car business in Europe. In
fact, it has required the vehicle to provide the space for enterprises to start their own business
regarding charging enterprises. On the other hand, Electric vehicle repair and servicing is another
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type of profitable business where entrepreneur successfully start own business. In Europe, there
are large number of people use the electric vehicle on regular basis. it is also another reason for
visiting the electric car repair so that they always use the electric vehicles.
Another type of profitable electric vehicle regarding the enterprise idea, an entrepreneur
who are interested to start the business of branding and spraying. This type of business will help
for entrepreneur to establish the workshop of electric vehicle. Many entrepreneurs choose the
business of Spare parts of electric vehicle because it will be demanding in the market which
provide the services of customers those who will use electric vehicle.
Recycling of electric car batteries are the best business opportunity for entrepreneur to
start business related the electric vehicle. It is the best option to go towards the recycling and
refurbishing the batteries. Before starting the business, it makes sure that business executive
knows about how to get use and maintain the electric car batteries.
Businesses linked to the automotive industry
The automotive industry includes the different type of business beside for manufacturing.
The organizations are focused on the parts that can use in electric vehicles such as car. The
Rubber Fabrication business linked to the global automotive sector that may not be profitable for
long term development. The rubber enterprise related to the automotive industry for making the
parts of electric car such as seals, tires, wiper blades and belts etc. There are approximately 75%
automotive sector may use the natural rubber to manufacture tiers of vehicles. It must produce
and distribute the manufacture part of vehicle sell in wholesalers (Franken, berger and Stam,
2019).
Rubber is an essential material for electric vehicle manufacturing where it can have made
tires which are important part of car. In additional to use the rubber for making different parts
such as seals. It is durable and easy to modify as per requirement of vehicle manufactures. It has
increases the demand of rubber in the automotive industry approximately 80% of rubber
production. In this way, it can be identified the demand of rubber in global marketplace.
On the other hand, Mined Iron raw materials enterprises also linked with the automotive
industry that can use the components in auto mobile manufacturing. Steel is mainly used to
construct the body of vehicle such as door panels, roof and beam. The advancement of
technology has enabled to the auto mobile manufactures for utilizing various type of steel that
can differentiate the rigidity levels.
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CONCLUSION
As per discussion, it concluded that electric vehicle is an advancement technology that
control the overall environment through emission and other type of noise pollution. It has
summarised that the major forces which help for shaping the enterprises' environment of car
manufacturing industry. It also identifies the main reason why the production of electric car
increases and link with the changes that have already placed in the industry. Furthermore, it can
be identified the emerging business opportunities which may present to the entrepreneur.
Moreover, it also analyses the current businesses that must link with the global automotive
industry and may not be profitable in terms of long run to investment.
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REFERENCES
Books and Journals
Colmenar-Santos, A. and et.al., 2019. Electric vehicle charging strategy to support renewable
energy sources in Europe 2050 low-carbon scenario. Energy.
Crane, A., Matten, D. and Spence, L., 2019. Business ethics: Managing corporate citizenship
and sustainability in the age of globalization. Oxford University Press.
de Rubens, G.Z., 2019. Who will buy electric vehicles after early adopters? Using machine
learning to identify the electric vehicle mainstream market. Energy. 172. pp.243-254.
Earl, J. and Fell, M.J., 2019. Electric vehicle manufacturers' perceptions of the market potential
for demand-side flexibility using electric vehicles in the United Kingdom. Energy policy.
129. pp.646-652.
Fischer, D. and et.al., 2019. Electric vehicles’ impacts on residential electric local profiles–A
stochastic modelling approach considering socio-economic, behavioural and spatial
factors. Applied energy. 233. pp.644-658.
Frankenberger, K. and Stam, W., 2019. Entrepreneurial copycats: A resource orchestration
perspective on the link between extra-industry business model imitation and new venture
growth. Long Range Planning.
Khaligh, A. and D'Antonio, M., 2019. Global Trends in High-Power On-Board Chargers for
Electric Vehicles. IEEE Transactions on Vehicular Technology. 68(4). pp.3306-3324.
Mounce, R. and Nelson, J.D., 2019. On the potential for one-way electric vehicle car-sharing in
future mobility systems. Transportation Research Part A: Policy and Practice. 120.
pp.17-30.
Nykvist, B., Sprei, F. and Nilsson, M., 2019. Assessing the progress toward lower priced long
range battery electric vehicles. Energy policy. 124. pp.144-155.
Pedada, K., Arunachalam, S. and Dass, M., 2019. A theoretical model of the formation and
dissolution of emerging market international marketing alliances. Journal of the Academy
of Marketing Science. pp.1-22.
Qiao, Q. and et.al., 2019. Life cycle greenhouse gas emissions of Electric Vehicles in China:
Combining the vehicle cycle and fuel cycle. Energy. 177. pp.222-233.
Ziegler, M., 2019. There are individual solutions for individual mobility needs. MTZ worldwide.
80(1). pp.26-29.
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