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The challenge and Opportunities of the Automobile Supply Chains in China in the Era of

Digitalization.

Student’s Name:

Institutional Affiliation:

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Table of Contents

Introduction...............................................................................................................................................3
Research Background...........................................................................................................................3
Research Question.................................................................................................................................5
Research Implementation Summary........................................................................................................5
Methodology..........................................................................................................................................5
Thesis Structure.....................................................................................................................................6
CHAPTER 2..............................................................................................................................................6
LITERATURE REVIEW.....................................................................................................................6
The challenges in automotive supply chain in the digitalization era..................................................6
Automotive production networks, European industrial peripheries and Industry 4.0..............................8
The “Neo-Fordist” car industry under stress: Late revenge of “Wintelism?”..................................9
Digitalization in the automotive value chain......................................................................................11
The era of new energy vehicles...........................................................................................................12
CHAPTER 3............................................................................................................................................16
METHODOLOGY..................................................................................................................................16
Research Design...................................................................................................................................16
Data sources.........................................................................................................................................17
Empirical Approach............................................................................................................................17
Definition of the variables.......................................................................................................................18
Innovation measurement.....................................................................................................................18
Trade policies and uncertainties are being measured.......................................................................18
Control variable...................................................................................................................................18
Data collection......................................................................................................................................19
Primary data........................................................................................................................................19
Secondary Data....................................................................................................................................19
CHAPTER FOUR...................................................................................................................................19
Results..................................................................................................................................................19
Analysis....................................................................................................................................................21
Conclusions and Discussion................................................................................................................22
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Recommendations................................................................................................................................24
References................................................................................................................................................25

Introduction

Research Background

The automobile is among the most successful manufactured products in the past century,

automobile is believed to be among the fastest mode of traveling, flexible, comfortable and

affordable transport mode and it has become the status symbol or the way that individuals uses to

reflect their identity. Automobile are very important and will continue to be for the smooth

operation of various industries, societies and sectors in the global economy. Automotive industry

is among the major economic force in various economies. Automotive industry begun in

Germany and France, before coming to North America during the mass production era and it

developed the Japan and Korea Republic. In the recent years, China has emerged as the global

leader in the automotive industry especially with the advancement in the electric vehicle

technology, features, volumes of vehicle, sales choice and trade and the contribution to the
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automotive sector and the GDP have grown tremendously in history. The growth of the

automotive industry is intertwined with the mass production and consumption which is

synonymous with the twentieth century. The automotive industry is making substantial

contribution to the global economy and to the global growth and development (Brewer et al.,

2006). In 2018 the trade in Motor vehicles alone reached US$1.5 trillion which was much more

than the trade in the oil, coal, gas and other communication products. Automotive industry is

very capital intensive, it drives innovation and also generates billions of dollars from the

investments and in terms of livelihoods and jobs it creates. Automotive industry has been the

leader for the research and development in the manufacturing. The industry constantly invests in

the development of the greener and safer vehicles which are produced through the new

technology and materials.

Through the digital technology, individuals have significantly altered their interaction with the

surroundings. The technological novelties and the personal gadgets like mobile devices, personal

computers, advanced TV units, drones and the self-driving cars among other wearable devices

have altered how the society access and exchange such information.

In the last three decades, the technological advancements in the information and communication

technology (ICT) through supporting advancement of the digital platforms and market. The

digital transformation has had significant impact on the manner in which services, goods and

information are bought sold and even exchanged in the market (Graue et al., 2004). There is

more cross border trade which is taking place in the form of the digital nature. That trend has the

possibilities to continue into the future. The qualitative analysis is very important in identifying

mechanism through which the new technologies and digitalization is capable of transforming

business and affect international trade. This research complements the qualitative analysis
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through the quantitative estimation concerning the changes in size and patterns of the

international trade through the use of WTO which the model for the global trade (Ambrosino et

al., 2008). The global uncertainties such as the COVID-19 pandemic, the price wars are resulting

in the new technical and operational challenges and opportunities for the automotive sector. The

automotive players have adopted the digital technologies across their procedures starting from

the product design, procurement, supply chain, production even to the sales and marketing.

Various automotive firms in China and other regions of the world already have established an

enhanced digital capability via re-organization, creation of the digitalization business units and

the task forces, other companies are also creating partnerships, acquisition and forming joint

ventures in creating resilient business.

Research Question

What are the challenges in automotive supply chain in the digitalization era?

What is the motivating factor for automotive company to invest in the digitalization?

Research Implementation Summary

China is one of the countries in the Asian continent, the country is popular with mass production

of automobile spare parts and there are other auto-manufacturing company. The digital

innovation is transforming the global economy. The decline in the search of information costs,

emergence of the new set of players, rapid growth of the new products which results from the

digital technology that boosts the global trade inflow, while also threatening security and privacy

issues across the world.

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Methodology

Phase 1: application of the online national questionnaires developed to evaluate the attribute

“care coordination,” and the variables which might influence such variable.

Phase 2: Case studies in the each of the selected region will be selected to deepen the successful

analysis from the primary to the secondary care and back in every area.

Thesis Structure

The structure of thesis will follow introduction; which contains the background information

about the topic, research objectives and the research questions. Chapter 2 will be literature

review, which mainly seeks to answer the research objectives. Chapter 3 will be the methodology

which comprises of data collection method, and data analysis. Chapter 4 will be the research

findings and discussion, while Chapter 5 will be the conclusion and recommendations.  

CHAPTER 2

LITERATURE REVIEW

Innovation technology has considerable capabilities for boosting the countries potential

especially for the developing countries. In the last three decades, there has been a rampant

development in the communication and information technology (ICT), through supporting the

advancements of the digital platforms and markets, these have substantially impacted the manner

in which services and information are sold, bought, and exchanged (Bechtsis et al., 2017). There

are more cross border transactions that are taking place in the form of the digital transactions,

and such trend is likely to increase into the future. Qualitative analysis is very useful when

identifying the techniques by which these new technologies and the digitalization can influence
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the international trade. In this section we shall analyze some of the challenges and opportunities

that arise as a result of the digitalization especially in automotive industry.

The challenges in automotive supply chain in the digitalization era

This section discusses the digital transformation that represents the dual challenge associated

with the digitalization of the automotive industry. Firstly, the location of production experiences

a fundamental challenge as far as their key role in the production network is concerned. The

increased automation might undermine the competitive advantage in relation to the lower cost of

labor and even more flexible arrangements in the labor markets. The new technology might

replace the tasks that are knowledge intensive which is usually undertaken only by engineers in

the production location resulting in the effective and downgrading of the manufacturing unit

positions in the value chain (Schniederjans et al., 2020). Similarly, the digital technologies might

support decentralization of activities across the production network, which will allow the

upgrade of the production sites via the advanced manufacturing technology. Secondly, there are

jobs challenge, it has been noticed that those countries that specialized in production are very

vulnerable to the job displacement impacts associated with the new technologies since most of

the tasks that they have specialized on can be automated through digitalization. The emergence

of the new technology also changes the nature of work in production. That entails the changes in

the nature and quality of skills that is required from the employees and the level of autonomy

that the workers exhibit while conducting the tasks, and the intensity of work. The digitalization

in the production is usually related to the Industry 4.0 technologies. They combine the data

analytics, production machinery and Internet of Things into the cyber-physical systems. The list

of the technologies related to the industry 4.0 comprises of the industrial sensors, collaborative
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robots, (cobots), machine learning, predictive analytics, autonomous in plant logistics, simulation

and the virtual reality and the wearable.

The automotive industry in China is characterized through the division of labor which is

organized through few multinational companies (MNCs), that exists between the headquarters

locations whereby the production is collocated with the technology and the business

development among other intangible activities (Kumar 2021). The challenges that are present in

the automotive sector are addressed via the case studies concerning the automotive sector in

Europe.

Automotive production networks, European industrial peripheries and Industry 4.0

The production networks in the automotive sector are characterized through the hierarchical

structure whereby the multinational company are playing a vital role. Some of the of the OEMs

like the Volkswagen Group and the PSA Group, developing the final products, assembly

vehicles and organizing the supplier relationships in the production network. The auto-

manufacturers are currently depending on small number of supplier companies which dominate

the tier 1 supply operations by which they have forged close ties based on the interdependence

(Makris et al., 2019). They are sharing some of the research and development functions and are

also closely linked through lean production and just in time model. There is complicated

geography whereby the business relationships are span the world. While the distinct regional

division of labor has also emerged in the regions such as Europe. Within such regions, there are

hierarchy that exists between the main locations whereby the headquarters of the MNCs are

situated together with the peripheral locations (Queiroz et al., 2019). The digitalization together

with the rapid emergence of the new-energy vehicles together with the mobility systems are

driving the massive restructuring of the production models as well as the value chain in the world
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automotive sector. The underlying alterations in the base technologies of propulsion, driving and

control of cars and the traffic constitute comprises of potentially disruptive innovations which

the automotive sector has not perceived in the past decades (Dutta et al., 2020) There is a

continuing structural overcapacity in the automotive sector, the frequent breakdown for the

vehicle traffic, and the related ecological crisis in the megacities across the world.

China has been the center for the automotive transformation, the extraordinary build-up of the

state of the art in the car production capacity in the past years has enabled China to become the

leading production automotive production site and market for automobile across the globe. From

the early 2000s, the rampant growth of the automobile production and the consumption of the

Chinese has offered a safety valve for the structural overproduction in the global automobile

sector, however, it has also brought its own fair share of social and environmental problems to

the country (Tziantopoulos et al., 2019). The Chinese government had recently initiated some set

of policies that rapidly create the modern age automobiles together with the new system

mobility. The main objective is for leapfrogging the technologies in the industrialized countries,

value chain of the future mobility and the innovation networks.

The “Neo-Fordist” car industry under stress: Late revenge of “Wintelism?”

The present changes in the automobile sector does not merely present the new technological

paradigm, they comprises comprehensive rupture of the automobile production models,

innovation strategies, together with the corporate structures which were initiated under the

Fordist model of the mass production in 1920s and it was revised during the lean production era

in the 1980s and 1990s (Saengchai & Jermsittiparsert, 2019). The emerging alterations are

comparable to the transformation of other mass-production sectors, whereby the “post-Fordist,”

restructuring resulted in the reversal of the value chains, and production model like the
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information technology (IT) and the electronics. Similar to those old days, the current alterations

in the automobile industry is presenting the changes in the international division of labor and

shaping the global production networks. The automobile sector has usually been considered to be

the paradigmatic sample for the “Fordist” mass production, and consumption, which is controlled

through a strong bargaining relation that exists between the trade unions and the employers. In

the 1970s during the global economic crisis, automotive sector has been crucial and at the center

of the restructuring the production models via the lean production together with modularization

(Schniederjans et al., 2020). Such restructuring has resulted in a refurbished model of the

automobile consumption with better varieties of the models, the market segmentation and

differentiations with even shorter model cycles. The accumulation regime constantly rely on the

private car ownership as the main norm in the consumptions of the households. That has pushed

for the mass production as well as the concentration of capital in the automotive sector to a larger

dimension with limited flexible specialization as the alternative pathway for the capitalist growth

and production.

The technological change trends brought about the following sets of disruptive factors which are

relatively independent from each other. They are as follows:

New energy vehicles (NEW): Electrification of the automobile is big promise to resolve a major

environmental issue of the car centered mobility, which is the carbon emission (Yadav et al.,

2020). It is therefore, provides the lifeline for the survival of the newly established growth model

of the automobile sector, however, it renders most of the skills and know-how obsolete which

radically reduces the labor aspect in the car manufacturing by almost 50% as per the estimation.

Digitalization also brings about the new players from the new-energy components, those that

specializes in the car batteries and the power-management systems.

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Digital driving and the control systems: The digitalization of the driving brings even bigger

players from the IT sector, their innovative models and the market control among the financial

power, which entails the venture capital (Queiroz et al., 2019). Such advancement challenges the

old-style innovation cycles of the automotive sector and it implies a strong shift in the market

control from the brand name productions to the providers of the vital digital driving system

components and other related partners in the artificial intelligence and the big data.

Mobility network: digital mobility acts as the main driver that breaks up the model of the

individual or private ownership as the dominant consumption norm. It helps in shifting the

innovation centers downstream to the network which helps in the sharing of the used cars that are

comparable to other mass-production.

Digitalization in the automotive value chain

Apart from the rapid technological advancements in the core automotive production,

digitalization is set to bring revolution in the whole automotive supply chain in China. The

interconnected supply chains are improving the end to end management of the production

procedures and reducing the costs and the lead time through the increase of the supply chain

transparency via partner system integrations, and the advanced analytics of the data, and also

increasing the process efficiency in the value chain from the design to production and

distribution (Agrawal & Narain, 2018). Digitalization further alters the automotive value chain

by the predictive vehicle maintenance. In the in-vehicle diagnostic systems, the smart

components together with the ubiquitous connectivity will help in alerting drivers whether there

are some problems instantly.

Dementiev (2021) writes that the transition to various digital technologies are related with

increase in the requirements of consumers in the market which is saturated. The impact of this
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technologies on configuration of the chains of value and on the special locations of the links of

production for the chains. An analysis based on the approach of the exact situations in the

individuals industries which are used to identify changes which are being studied. The

researchers show that the popular concepts of smiling curves which characterize the distribution

of values which are added between the participants chain and strive to possess their

competencies that are common for the chains. The risks experienced within the value chain in a

downturn within the global economies and measures to enhance sustainability of the chains

which are considered.

The era of new energy vehicles

Wang et al., (2021) write that from the perspective of the prices of crude oil, the wittings

investigate the impacts of other new energy vehicles on the quality of air through the application

of parameters that vary the stochastic volatility vector auto regression approach. The NEV

benefits from all the adjustments that are continuous and the improvements in standards by the

Chinese government. The share of new energy vehicles within the market has been improving

continuously. The empirical outcomes show that the increments in vehicle fuel efficiency lower

the PM2-5 emissions, which is consistent with the environment and energy theoretical

approaches and their replacement of traditional energy with newer sources of energy, which is

helpful for controlling pollution in the environment. The prices of oil have a direct negative

effect on the concentration of PM2-5 in the environment and the influence of new energy

vehicles on the quality of air, which is also regulated by changes in the prices of oil. A higher

price of oil results in an increase in the driving costs and the number of consumers who are

highly inclined to purchase new energy cars, which attains the purpose of improving the quality

of air to a particular extent. To improve the quality, the relevant stakeholders need to adjust the
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policies of subsidies for new energy cars as per the changes in oil prices and increase the prices

of gasoline or diesel taxes to offer some space for development for the market of new energy.

Lu et al. (2021) write that the outbreak of the COVID-19 pandemic has had a considerable

outcome on the automobile industry. The energy sector, as a pillar of economic development, is

facing difficult times as a result of the pandemic that has affected the entire world. The authors

review the impacts of the pandemic on the global energy sector in terms of the policies of the

government, employment, price, demand, counter approaches, and academic studies that focus

on the two largest energy countries in the nation, which are America and China. Despite the fact

that the virus has had a significant impact on the energy sectors, actions to address climate issues

have been paused, but they have become more urgent than ever (Bag et al., 2018). Experts

always point out that it is the right time to promote a vigorous transition to clean energy. The

authors discuss the progress towards a transition to clean energy, which includes mineral

resources for clean energy techniques, electrolyzes, and batteries. The study's findings indicate

that the stability of supply chains, energy storage, and policymakers during and after the

pandemic are critical challenges to the transition to other forms of clean energy. The transition,

however, may generate new employment opportunities and create some recovery for the

economy and the environment.

Wang et al., (2021) write that according to the panel information of 31 provincial capital cities in

the nation, from January 21st to November 20th, 2020, The study analyzes empirically the effects

of all the cases that are newly confirmed and the daily new deaths from the pandemic PM 2, CO,

SO2, NO2, and PM2. 5 emission forms of consumption of green energy through the use of

generalized methods of systems. The researchers conclude that the pandemic can inhibit all types

of emissions in that there are greater numbers of cases that have been confirmed and deaths that
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bring about stringent anti-epidemic policies, fewer emissions, and better quality of air quality in

China. Moreover, people use methods of cross-sectional analysis, sample segmentation, and

emission pollutants of the top three nations in terms of the country’s GDP to determine

robustness. Overall, the evidence enhances the debates on air quality after the pandemic. This

evidence from China offers beneficial experiences that correlate with the provincial information.

Su et al., (2022) write that the industrial revolution era was a culmination of the accelerating

speed of evolution and digital transformations in society. It had a vital impact on the dynamics of

the labor markets. Tests of bootstrap casualty were referred to as the best approach to analyze the

aspect. The approach was undertaken to commence the triggering of various discourses on the

benefits that originate from different forms of employment and the benefits of technological

innovations and active responses to all the challenges that are associated with technological

progress within the markets of labor. Through the study of interactions that exist between various

patents and the new opportunities for employment, the researchers identified that the interactions

between employment and innovations are very complicated. Regarding the positive impacts, one

could confirm that technological innovations have generated a significant boost within the

markets for labor. The vices could also be refuted via the negative influences that surround the

concepts because of the effects of employment, which is greater than that of creation. The new

opportunities for employment affect the PIs negatively, which indicates that the markets for labor

could be the primary indicators of development and innovation. The society of the Chinese has

been experiencing digital transformations even before the pandemic. As a result, short-term

employment has new impetus.

Zhou et al. (2021) write that since the pandemic started in 2019, the transport industry has been

negatively affected. Many countries around the world have adopted various policies and
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restrictions to help prevent the spread of the pandemic. All this resulted in a significant drop in

the demand for transportation in China. China was the first nation to detect the virus. It was

equally the fastest nation to recover. All the existing impacts and policies that were reviewed to

analyze the impacts of the pandemic on the transport sectors in the urban regions and propose

significant measures that may be undertaken to lower the impacts of the pandemic. The

researchers review the impacts of the pandemic on the urban systems of transport and other

operations and the best approaches of the government to respond to the viral pandemic. The

study analyzes the measures of recovery after and surging pandemics as well as their hierarchical

response systems (Kumar 2021). It also explores empirically the impacts of the measures of

recovery. The study therefore adopted the Event Study Methods to analyze the impacts of the

pandemic on the transport industry quantitatively. The approach was also used to analyze all the

policies developed against the pandemic on the flow of traffic and their sequence in the

resurgence of the pandemic in regions like Beijing, The findings of the study offered a solid

policy of the experiences and the implications for the construction of sustainable urban systems

of transportation to enhance the reliability, resilience, and flexibility of governance and traffic

after the pandemic.

Luan et al. (2021) write that traveling behaviors and activities have been significantly impacted

by the outbreak of the pandemic. The pandemic caused significant changes in the travel choices

of various policymakers because they had to come up with the most appropriate responses to

mitigate the negative consequences on the travel industry. The researchers sought to investigate

how the pandemic could affect the model and choice of travel, as well as the intentions to

purchase cars. The estimation results indicate that there is a regret aversion in psychology that

does not have a dominant proportion of all this is combined with the statistical outcomes from
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the official departments, the researchers concluded that public transportation displays a greater

propensity on longer trips, whereas the industry of ride and hailing services was shaken

significantly. Regarding the intentions of traffic tool purchases, people who had no cars preferred

to purchase electric wheel cars instead of automobiles. The findings of the study and its

contribution to the implications of policy offer assistance to authorities in understanding the

citizens' modes of travel and preferences under the impacts of the pandemic.

Abbasi et al., (2021), write that the pandemic appeared as a vital disaster for health in the present

day. It caused a crisis in different sectors across the globe. Humans have experienced health

emergencies since the onset of the calamity. The Corona Virus also disrupted the global

economy. All of the global efforts to slow the spread of the pandemic, such as the establishment

of testing centers, quarantining suspects, imposing significant lockdown measures, and

restricting larger social gatherings, had an impact on the transportation sector and the

environment. The researcher’s findings suggest eight significant strategic recommendations

seeking to reduce the environmental impacts and other twenty-five chosen approaches on a

short-term basis, which resulted in the thriving of the available biodiversity. The researchers

suggested the introduction of self-produced medical chains of supply and the necessity of

avoiding the need to rely on other nations for medical supply. The study concluded that it is

important to empower organizations to practice conservation and provide adequate resources for

the production of products that are friendlier to the environment.

Kimble & Wang, (2013) in there study seek to determine the overarching theme on the

significance of innovations which were developed in economies that are emerging. The study

focuses more on the development of different alternative of vehicles which are powered by

engines that combust internally. The researchers adopted a broad strategic approach of two
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different sectors in the NEV sector in china which is the pure electric vehicle and the low speed

electric vehicle. The findings were compared and conclusions drawn from them. The researchers

found that the sector of electric vehicles is considered via central governments as a vital sector

for the development of industries in china. The government considers the innovation as the

future of industrial growth in China.

CHAPTER 3

METHODOLOGY

Research Design

The design of the study is the overall strategy that is chosen for the integration of various

components that need to be studied, which are in a logical and coherent manner (Pandey &

Pandey, 2021). It ensures all the users address the emerging and relevant challenges effectively

so as to address the emerging research problems.

Sample selection

The sample for this study involved sellers of automobiles and the buyers from various regions in

China. The total sample involved 400 participants, 200 were buyers while the other 200 was

sellers. The other sample involved 20 case studies on the attitudes and behaviors of consumers in

the automobile industry.

Data sources

A data source is defined as a raw set of information that is not processed to offer meaningful

information about the topic of study. When such information is collected from the initial sources

of information, it is referred to as primary information. When the information is collected

directly from preexisting sources, it is called "secondary data" (Abutabenjeh & Jaradat, 2018).
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The primary source of information for this study is the feedback from the questionnaires. The

second source involves the website on the index of trade policies. The other source is the

measure of the innovation outputs of the firms using parent information from the Chinese

Research and Data Services. Additionally, there are other variables which were obtained and

calculated as per the China Stock Market and Accounting Research. Mitigating the potential

impacts had the outlier’s winsorzing all continuous variables at 1 to 99 percent levels in every

tail.

Empirical Approach

Testing the hypothesis implies predictions that the policies of trade and uncertainty have a

positive association with corporate innovations after ensuring there are significant controlling

determinants. The testing process involved reference to various research materials and the model

of estimation via an OLS regression to create a link with various trade policies that are uncertain

about the existing corporate innovations and the specific characteristics of the firm, among other

determinants.

Definition of the variables

Innovation measurement

The input of innovation is the percentage of a particular study and development of the expenses,

which is divided by the total number of assets and multiplied by 100. While it is common to

measure the output of a given innovation by the total number of patents that are guaranteed,

China classifies patents into three vital categories: design patents, patents based on utility

models, and patents of invention (Abutabenjeh & Jaradat, 2018). The invention patents involve

various forms of novel technologies, the patents of utility involve all the new applications of the

available technologies, and the design patents tend to cover all the limited advances in
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technology. The study measures the innovation output with the two patent-based metrics, which

include the invention patent, design, and utility model patent.

Trade policies and uncertainties are being measured.

The study adopted the Chinese monthly policy of trade uncertainty index to capture the policies

of trade uncertainty. It transforms monthly information into annual data via weighted average

techniques of a twelve-month policy of trade and an index of uncertainty.

Control variable

The control variables in this study were the subsidies of the government, ownership by the

management, and the ratio of shareholders who are in control. The shareholding rations of the

shareholder who is in control, the nature of ownership, the size of the board, the ratio of all the

independent directors, the ratio of cash flow, the size of the firm, and the ration of all the

liabilities.

Data collection

The process of data collection involves various approaches used to obtain primary and secondary

data. The data for this study is from secondary and primary sources.

Primary data

This information was obtained directly from the sources. The study implemented the use of

structured questionnaires to collect information from the sample.

Secondary Data

The study involved a systematic reviews of various case studies which were related to the topic

of interest.
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CHAPTER FOUR

Results

The primary sources indicate that more buyers have intentions of purchasing vehicles despite the

challenges in the chains of supply. The pandemic in particular affected the chains negatively

causing many of the buyers to spend more time in their homes, discovering the new pleasures of

clean air and lower levels of pollution. The pandemic crystallized the attitude of people towards

the environment. This has increased the concerns about the potential of non-ICE automobile

buyers who indicate that the pandemic has increased their level of awareness about the

challenges in the environment. Crucially, the concerns are reflected in the increased intention to

purchase vehicles that are highly sustainable.

The findings from secondary sources represent a significant shift in consumer attitudes, which

accelerates demand for electric vehicles and alternative powertrain vehicles. Such initially,

consumers were expressing a much more generalized concern about the issues of sustainability.

The concerns, however, never translate into actions when they want to purchase other vehicles.

Any boom in electric vehicles will be a part of the greater resurgence in vehicle purchases

regardless of the train of power, and it was catalyzed by a change in the pattern of morbidity as

well as the greater risk of the pandemic. There were fewer long work journeys that were coupled

with other lingering concerns over the safety of public transportation, which are cementing the

car as a reduced risk of infection. Such reasons coerce the manufactures to shift the automobile

industry to digitization.

The case studies were from different periods of study. The sources indicate the pandemic

generated significant debates on the value of new energy vehicles to enhance the quality of air.

The pandemic affected the chest, causing breathing challenges. The condition is worsened by
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inhaling low-quality air that contains particles that cause chest infections. One of the major

causes of poor air quality is emissions from automobiles. Since the study seeks to determine

whether the manufacture of new energy vehicles will reduce the negative impacts of the

pandemic, The availability of policies for new energy policies It also indicates the absence of a

unified conclusion on the evolution of policies in the industry of new energy vehicles in China as

well as the nodes of time. Some scholars trace this development to 1991, while others attribute it

to 2019. The scholars categorize the system of policy development into four stages of evolution,

where the starting stage is the initial phase of formation, which was between 1991 and 2006. The

stage was guarded by a notice of adjustments in the structure of the automobile industry which

implied that there should be development of vehicles that are friendly to the environment and

those that enhance the saving of energy. The phase started with the inclusion of electric vehicles

in the eighth five-year research plan of the national science and technology plan of research.

Research on electric cars and their components was conducted and later developed while the new

energy vehicle component was not yet proposed.

From 2007 to 2009, the policies related to new energy vehicles were formed. The landmark

policies within this stage were the production rules and admission administration of the New

Energy Automobile. During this stage, the definition of the new energy vehicle industry was

proposed. Alongside the expansion of the second round of promotions of energy-saving new

energy vehicles and the expansion of the project demonstration to the private car sector, the

evolution of new energy vehicle industrial policies started developing rapidly from 2010 to 2014.

During this time, the industry was identified as a strategic industry that was emerging. Therefore,

more relevant policies and approaches for the industry were developed continuously, and the

system of policies was established gradually. The policy later transitioned from a selection of the
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government to a selection of the market and from the orientation of producers to systems of

customer orientation.

Analysis

The development of electric vehicles is vital for the achievement of sustainable goals, while the

pandemic affects the global markets and brings challenges to the entire industry. China is among

the regions that were affected by the pandemic, and that takes up a greater part of the global

electric vehicle market, which attracts the growing attention of the trends that have emerged in

the electric vehicle market. The pandemic has therefore presented a greater opportunity for the

growth of the electric vehicle industry because more individuals are aware of and willing to

engage in sustainable environmental practices. Despite the greater demand, the travel restrictions

that were caused by the pandemic have greatly disrupted the supply of materials that were used

for the assembly of electric vehicles. Most of the manufacturers depended on imported supplies,

and that accelerated the domestic substitutes of inventory and exploitation for other parts that are

critical. The massive lockdowns have also resulted in significant disruption to operations and

patterns of production.

From the questionnaires 80% of the total sample indicated that the pandemic had significant

impacts on the supply chain. 70% indicated that the automobile industry was affected

significantly. 10% did not understand the value of digitizing the automobile industry. 60% of the

sample indicated that the pandemic was a greater motivation for various automobile

organizations to engage in digitization. Out of the case studies 20% of the cases had no

significant correlation with the digitization of automobile industries. 85% of all the cases

indicated that the pandemic affected the automobile industry significantly. 75% of the cases
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indicated that the pandemic is a greater motivation of shifting the supply chains of automobiles

to digitization.

Conclusions and Discussion

The findings of the study indicate that disruption of the supply chain has a significant impact on

the sales and purchase of automobiles. The findings also indicate that the negative impacts of the

pandemic have significant implications for the automobile industry. These findings verify the

hypothesis, and they also respond to the research question because they highlight challenges

experienced in the automobile industry since the onset of the pandemic. The global lockdowns

created a huge disruption in exportation of Chinese spare parts. It also interrupted the large-scale

manufacture of spare parts in Europe and the closure of various assembling plants in the US. The

benefits of shifting to green energy approaches for transportation. Non-work travel is anticipated

to resume after the pandemic. However, the levels of work among the population will remain

low. There were bounce banks in the patterns of mobility from the heights of the first wave of

the pandemic. Such sudden shifts necessitated the need of digitizing the automobile industry.

In the world, non-related work travel seeks to recover more than work-related travel. The total

number of non-work-related monthly trips that consumers intend to take in the future for

shopping, leisure, or visiting family and friends has returned to pre-pandemic levels. The

intentions of work travel remain within the slow lanes. Even though all the journeys that were

taken across the board were expected to be reduced compared to the pre-pandemic levels, public

transport remained the greatest loser in modal choices of travel options. The respondents

indicated that they wanted to purchase a car in the near future, with about two thirds planning to

purchase one in the next year. The sale of alternative powertrain cars took off as many customers

preferred purchasing vehicles powered by hydrogen. The upward demand aligns with new
 24

studies and analysis on the use of electric mobility lens forecasters, which indicates that electric

vehicle sales in Europe will exceed those of the ICE.

The new energy vehicles also generate a significant surge in the levels of sustainability. Many of

the significant findings in the survey are factors that affect the potential of electronic vehicle

purchasers. A tipping point was attained in green environmental issues and consciousness for

various years, a peripheral concern that has been lagging behind various practical aspects like the

cost and the range, which are considered the biggest influences on those who buy electronic

vehicles. The impact of such a shift is that from all the required subsidies and the financial

support to ensure the uptake of electronic vehicles, various potential buyers are prepared

adequately to pay premiums and join the club of green drivers. At least 66% of all buyers pay

premiums of over 10% for electronic vehicles, which rises to about 90% for those who intend to

purchase an electric vehicle. The pandemic has caused individuals to have a greater motivation

to conserve the environment. Society today has individuals stating that it is their sole

responsibility to take care of the environment and adopt transport approaches that are friendlier

to the environment. The two factors that most affect the choice of transport for future and current

purchasers of vehicles are the safety from infections and the hygiene of the buyers. The other

aspect is the cost and the charging conundrum. The cost, range, and charging infrastructure are

vital factors that prevent buyers from purchasing electric vehicles. Sustainability may be

regarded as the main upside benefit to the ownership of electric cars. This does not imply that the

core, charging infrastructure, and range are entirely vanquished.

Recommendations

Even though the prospect of enhancing the sales of new energy vehicles is good news for vehicle

dealers, it brings significant challenges. The greatest question is whoever wins the battle for
 25

green consumers. The products of the next generation keep penetrating the available markets

with a significant range of attractive gestures. To overcome these challenges requires that the

sellers of electronic vehicles get to identify better financial prospects. The sellers should also

find a meaningful way of bridging the gaps in information beyond finances, because confusion

over the challenges of the perceived performances and charging outcomes of the electric vehicle

shows is rampant. I would recommend that the government and the industries get to learn about

the effectiveness of vaccines and programs of hesitancy at the time of the pandemic. The sellers

can also increase their efforts to educate the buyers about the importance of electric vehicles.

Such education programs will help reassure potential buyers that their choices are sensible.
 26

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