Since the emergence of the Covid-19 pandemic more than a year ago, there has been heightened awareness of the impact we as humans have had on the environment particularly when it comes to carbon emissions.
The rapid economic growth in the pre-pandemic world took a heavy toll on the environment, with travel and transportation contributing much to the high levels of carbon dioxide in the air. But in view of the pandemic-related disruptions and restrictions, global greenhouse gas emissions plunged 7% to around 2.4 billion tonnes in 2020 from the previous year, according to research by the University of East Anglia, the University of Exeter and the Global Carbon Project.
As we slowly march towards a post-Covid world with the rollout of vaccines across the globe and the opening up of travel bubbles, questions are being raised as to how we can build back better and pivot to a more sustainable future. An area of concern is transportation, one of the largest emitters of greenhouse gases. In 2019, 29% of greenhouse gases recorded in the United States came from transport sources.
Already several companies in the Asia-Pacific are looking at new technology to pave the way for a new era of transportation in the post-pandemic world. South Korea’s LG Chem, for example, has committed US$4.5 billion to expand battery production for electric vehicles (EV) in the US. The EV industry has seen incredible valuations recently, with EV maker Tesla boasting a market capitalization of US$500 billion in 2020, surpassing the combined worth of the world’s nine largest car companies despite accounting for only a small fraction of car sales globally.
Bucking Sino-US tensions
Chinese EV makers NIO and XPeng have bucked Sino-US tensions to raise millions from American investors. The public listing of XPeng on the New York Stock Exchange last summer saw its shares surge as much as 67% on their first day of trading.
The excitement around new, environment-friendly modes of transportation bodes well for other aspirants such Vietnam-based Dat Bike, which has plans to produce electric motorbikes for the mass market. A heavy user of gasoline-powered motorbikes, Vietnam is an ideal location to encourage such types of transport.
For Son Nguyen, founder and CEO of Dat Bike, it has been an interesting journey trying to convince consumers in the Southeast Asian nation on the viability of electric bikes.
“Electronic bikes in the past in Vietnam were weak and low range, they could only run a maximum 30-40 kilometres per charge and they take around 12 hours to charge which is a long time,” Nguyen shares. “We need to prove to people that electric bikes can be powerful and are durable.”
Changing the mindset
He goes on to explain that in Vietnam electric bikes were seen as a substitute for bicycles, and not motorbikes, due to their low power. Nguyen has sought to chip away at that mindset by selling electric bikes that have a top speed of 80 kph, can fully charge in just three hours, and have a single charge range of 100 kilometres.
Just recently Dat Bike raised around US$2.6 million in its pre-Series A funding round to support its growth. “We are planning to spend more than 50% of our fundraising on product development,” Nguyen says. “It’s very important for us to build further on better technologies so that we can produce high-performance electric vehicles at an affordable cost. We are also looking at allocating 30% of the capital towards production scaling.”
Investors themselves are eager to take part in bringing about this new era of transportation. Last month, Chinese automotive group Zhejiang Geely and South Korean conglomerate SK agreed to jointly invest in a transportation and technology fund worth around US$300 million. Managed by GLy Capital Management, the New Mobility Fund seeks investment opportunities in renewable, hydrogen fuel, battery and materials ecosystem, semiconductors, and autonomous technology sectors.
“We’re not just looking at cars, we are looking at insurance models and components for cars such a lidar [light detection and ranging] or technology that aids in connectivity such as vehicle-to-vehicle communication. We tend not to focus as the end-product being the car,” explains Hrvoje (Harry) Krkalo, co-CEO at GLy.
Even as the pandemic persists, there will always a good opportunity for companies, investors and other market participants to reshape the way we have done things in the past, leveraging new technology to improve our lives.