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Trade and technology

A rough road ahead: Electric vehicles and semiconductors navigate geopolitics


Published 16 November 2021

Geopolitical undercurrents are causing upstream supply chains in the EV sector to fragment into localized ecosystems in China, Europe, and North America. The growing nexus between semiconductors and EVs will follow a similar pattern. Techno-nationalism will increase the likelihood of more restrictions on dual-use technologies, presenting complex challenges to global trade.

The existential threat of rising carbon emissions and climate change has prompted an historic shift to electric vehicles (EVs). Along with that shift, the global EV sector has become a pawn in a larger geopolitical competition.

EVs are a fusion of leading-edge imbedded technology. When viewed in the context of techno-nationalism, EVs are increasingly susceptible to a growing list of techno-nationalist rules and regulations, including export controls and other restrictions, as well as stipulations relating to data localization, security, and privacy.

At the heart of all EV technologies – including Artificial Intelligence (AI), software, navigation and communications platforms, and onboard sensory equipment – are semiconductors. An acute global microchip shortage in 2020 and 2021, exacerbated by the Covid-19 pandemic, has accelerated the geopolitical changes transforming the automotive sector.

In this second paper of the Hinrich Foundation EV and techno-nationalism series, Research Fellow Alex Capri examines rising trends that link semiconductors to a rapidly evolving global EV sector, including:

  • Emerging strategic partnerships between EV manufacturers and microchip companies
  • The blurring of the line between high-tech and automotive products
  • Challenges facing EV’s “dual-use” technology for cross-border investment and collaboration
  • New EV semiconductor technology: silicon carbide and gallium nitrogen microchips
  • Subsidies and government initiatives impacting the semiconductor-EV nexus

Download the first paper here.

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Author

Alex Capri

Alex Capri is a Research Fellow at the Hinrich Foundation with over 20 years of experience in value chains, logistics and global trade management, both as an academic and a professional consultant.

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