However, with evolving mobility trends, opportunities for polymers and composites is also witnessing a change. Since the automotive market sees a transformation from conventional vehicles to hybrid and electric vehicles; over 90% of the automakers have announced hybridization milestones that indicate the shift towards electrification. In 2020, over 8.4 million xEVs were sold globally, showcasing no impact of COVID-19 and recording 37.2% y-o-y growth. In 8.4 million unit sales, 3.2 million were pure electric vehicles that include battery electric vehicles (BEVs) and plugin hybrid electric vehicles (PHEVs), and 5.1 million were hybrid electric vehicles (HEVs) which include full hybrid electric vehicles (FHEVs) and mild hybrid electric vehicles (MHEVs). The market is likely to grow from 8.4 million in 2020 to 36.3 million in 2025, accounting for 38.2% of the total passenger car market. Currently, a majority (69%) of the market is accounted by battery electric vehicles (BEV) while plug-in hybrid electric vehicles (PHEV) account for 30%. Fuel cell electric vehicles (FCEVs) are still at a nascent stage and account for only 0.3% of the total sales.

As shown in the chart above, China and Europe continue to lead the market, together accounting for almost 84.3% of the sales. Demand is mainly driven by regulations related to emissions, incentives, and charging infrastructure. E.g., one of the key challenges faced by China is the reduction of subsidies for EVs in 2021 by 20%, which has resulted in slower growth of demand. On the other hand, Germany, a key demand center, doubled bonuses paid out from 2020, with the validity extending upto 2025; though the incentives for hybrid models is expected to be lowered from 2022. This along with other incentives such as reduced VAT makes it the fastest growing market.

The market is also driven by OEMs that have set ambitious goals for shifting to sustainable vehicles. For e.g., as a part of its “Reimagine” strategy, Jaguar plans to sell only fully electric vehicles from 2025 while Land Rover aims to achieve the same goal by 2030. BMW plans to deliver 2 million fully-electric vehicles by 2025 and 10 million by 2030. GM plans to introduce 30 new all electric models by 2025

In the GCC, the UAE leads innovation and adoption of EVs and related infrastructure through several initiatives. In 2020, there were 2,718 units sold in GCC countries, which showcases the slow adoption of electric vehicle technology. However, governments are working on strategies to improve the adoption of electric vehicles in the form of incentives and subsidies. Dubai aims to have 10% of all vehicles as electric or hybrid by 2030 and provides incentives such as free charging to non-commercial users upto 2021 and free parking at designated areas till 2022.

The KSA, still at a nascent stage, has been taking steps to grow its EV market as a part of its Vision 2030 plan. Riyadh saw the installation of the Kingdom’s first commercial charging station in 2019. A recent partnership between Schneider and GREENER, a sustainability and energy efficiency services provider, aims to develop infrastructure related to e-mobility.

Key challenges faced by the EV market include high price, limited driving range, and charging infrastructure. One of the most critical components of an EV is the battery pack, wherein high-capacity battery packs lead to a significant increase in weight: polymer composites and carbon fiber provide significant weight saving compared to metals. Polymers and composites can lower the weight of internal parts, body parts, and components such as sensors, capacitors, fuses, and connectors, resulting in longer ranges. Additionally, a large number of electrical and electronic components have the risk of higher heat generation; polymers can provide safety and protection. Overall, the number of components and complexity is far greater than Internal combustion engines (ICE), making polymer and composite material development important.

Several manufacturers are constantly developing products suited to EVs. Lanxess’ Durethan polyamides, Tepex composites, and Pocan polybutylene terephthalates are used in structural components, battery housing, and e-mobility charging infrastructure. BASF’s Ultramid, Advanced Ultramid, Ultramid, and Advanced Ultramid amongst other products, can be used across applications, including battery components, electric powertrain, charging infrastructure, and thermal management. Dow DuPont’s AHEAD (Accelerating Hybrid-Electric Autonomous Driving) solutions include advanced polymers such as Zytel HTN polyamide resins which are used in the fuel cell power train of Hyundai NEXO. SGL Carbon offers carbon and glass fiber-based composite top and bottom layers for battery enclosures.

Another trend expected to impact the radical future of the automotive industry is the possible advent of autonomous cars. While the segment is currently at a nascent stage, growth in volume and sophistication of autonomous vehicles would drive OEMs and other stakeholders to invest in the market. 4%-5% of vehicles globally are expected to have Level 4 automation by 2025, driven by evolving alternate and shared mobility models.

Source: Frost & Sullivan

The total market for privately-owned autonomous vehicles is expected to reach USD 60 Bn by 2030. Level 4 vehicles are expected to dominate the market from 2020 through 2030. Partnerships across the value chain including OEMs, technology providers, service providers, and start-ups will push the adoption of autonomous driving technology globally. Companies such as Waymo, Baidu, Argo and Pony.ai have been working on bringing driverless cars to the market. However, the market is also seeing some consolidation, with a Toyota subsidiary acquiring Lyft’s autonomous vehicle unit for USD 550 Mn and Uber selling its self-driving car unit to Aurora in 2020. Regulations have also been a key market barrier that has slowed approvals.

Multiple OEMs such as Tesla, GM, BMW, Hyundai and Toyota amongst others, have autonomous vehicles as a key development area of their strategic roadmap. GM’s Cruise began the testing of its autonomous vehicles in San Francisco in 2020 while Volkswagen Group plans to test its first fleet of self-driving cars in China.  Ford, in 2017, invested in Argo Ai, an AI startup and is currently testing its self-driving cars across cities in US.

In the GCC, again, the UAE is at the forefront of radical change. Dubai’s Autonomous Transportation Strategy forecasts that 25% of all mobility journey will be made via driverless systems by 2030. EZ 10 by Easy Mile has run trials in 3 locations in Dubai. Dubai Taxi Corporation acquired 200 Autopilot-equipped Tesla S sedans to develop a driverless fleet. Abu Dhabi’s Masdar city has launched self-driving shuttle – The Navya Autonom Shuttle, in 2018, that can transport 12 people at a time at a top speed of 25 kms per hour. Dubai’s Roads and Transport Authority (RTA)started trials of autonomous vehicles at the Expo 2020 site.

2019 saw the launch of the KSA’s first self-driving vehicles through a pilot project at King Abdullah University of Science and Technology (KAUST). The self-driving shuttles incorporate technology from Local Motors by LM Industries and EasyMile.

Autonomous cars demand the need for high-performance materials to suit specific requirements.  Safety would be most critical given the change in the way the vehicle operates. Numerous sensors, radar, LiDAR (Light Detection and Ranging), radar, and interior transformations would make the use of high-performance polymers and composites essential. Selection of materials would be complex due to the need for multiple factors such as resistance to temperature and moisture, dimensional tolerance, high transparency, and focus on lightweighting. Polymers would be needed to provide thermal insulation to minimize battery power leakage/ wastage and enable longer range. Application areas would be multifold, such as padded dashes to provide safety incrashes, connection harnesses and housing and integration into front grills and bumpers to mount sensors, amongst others. Polymers and composites used in the telecommunication industry would also find relevance for autonomous vehicles given the connectivity required both within the vehicle as well as communication with exterior infrastructure such as traffic signals.

Various grades of materials such as flame retardant polymers, ABS, PBT, PA and PP are being developed to fit the complex requirements for the growth of autonomous vehicles. Further, composites based on glass fibre and carbon fibre would maximize lightweighting while maintaining structural efficiency.

Covestro has developed polycarbonate wrap-around glazing that provides 50% reduction in component weight as compared to glass and improves thermal management. Lanxess’ PA and PBT polymers can be used for connectors and housing. Dow’s electrically conductive silicones can be used across radar, cameras, and 5G base station applications.

Along with electric and autonomous vehicles, the demand for polymers is also influenced by changing customer-specific trends. E-hailing and ride sharing has been witnessing an increasing trend. Growing synergies between various vehicle-sharing stakeholders will bring about a revolutionary change in the ridehailing environment. In emerging economies such as India and Indonesia, high traffic congestion will enhance the potential for motorcycle ride-hailing services and their integration into the Mobility as a Service (MaaS) paradigm. Online taxi services and corporate partnerships will emerge as the two largest opportunities for fleet owners. Overall, revenue potential from the eHailing market will exceed USD 1 Tn by 2030, with the proliferation of autonomous taxis. OEMs are expected to launch their own car-sharing platforms – for e.g., Tesla recently announced its own autonomous ride-hailing system.

Within GCC, investments from public and private organizations are expected to double the integrated multimodal services over the next 5-7 years.

GCC Overview for e-hailing and ride sharing

Compiled by: Frost & Sullivan

In addition to the polymers used for electric and autonomous vehicles, ride sharing and e hailing trends would increase the demand for polymers with a specific interest in affordability, self-cleaning capabilities, anti-microbial characteristics, and high strength resulting in less wear and tear.

Even with these disruptive trends, circularity remains at the core of all material innovation, and the automotive sector is no exception. While looking to build complex systems and solutions, OEMs and material developers continue to focus on recyclability and closing the loop. In November 2020, students from Technical University of Eindhoven, Netherlands developed an electric car made out of waste, including plastics from the sea, recycled PET bottles, and household garbage. Enel X made vehicle home-charging stations in 2020 with recycled plastics. Renault’s electric vehicle ZOE uses innovative fabric made entirely with recycled plastics.

On the whole, disruptive trends are changing the automotive industry, and polymers would be a key enabler shaping the evolution. Innovation through close collaborations across OEMs, polymer manufacturers, technology providers, and other stakeholders would be critical to achieving material development suiting the complex requirements of electric and autonomous vehicles.