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Visualized: A Global Risk Assessment of 2022 and Beyond – Visual Capitalist
Putting EV Valuations Into Perspective
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Visualized: A Global Risk Assessment of 2022 and Beyond
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Since the start of the global pandemic, we’ve been navigating through tumultuous waters, and this year is expected to be as unpredictable as ever.
In the latest annual edition of the Global Risks Report by the World Economic Forum (WEF), it was found that a majority of global leaders feel worried or concerned about the outlook of the world, and only 3.7% feel optimistic.
Ever year, the report identifies the top risks facing the world, as identified by nearly 1,000 surveyed experts and leaders across various disciplines, organizations, and geographies.
What global risks are leaders and experts most concerned about, and which ones are posing imminent threats? Let’s dive into the key findings from the report.
In the survey, respondents were asked to compare 37 different risks, which were broken down into five categories: economic, environmental, geopolitical, societal, and technological.
To get a sense of which risks were seen as more urgent than others, respondents were asked to identify when they believed these threats would become a serious problem to the world, based on the following timeframes:
By categorizing global risks into these time horizons, it helps provide a better idea of the problems that decision makers and governments may have to deal with in the near future, and how these risks may interrelate with one another.
When it comes to short-term threats, respondents identified societal risks such as “the erosion of social cohesion” and “livelihood crises” as the most immediate risks to the world.
These societal risks have worsened since the start of COVID-19. And as emerging variants threaten our journey towards normalcy, the pandemic continues to wreak havoc worldwide, with no immediate signs of slowing down.
According to respondents, one problem triggered by the pandemic is rising inequality, both worldwide and within countries.
Many developed economies managed to adapt as office workers pivoted to remote and hybrid work, though many industries, such as hospitality, still face significant headwinds. Easy access to vaccines has helped these countries mitigate the worst effects of outbreaks.
Regions with low access to vaccines have not been so fortunate, and the economic divide could become more apparent as the pandemic stretches on.
A majority of respondents believe we’ll continue to struggle with pandemic-related issues for the next three years. Because of this, the medium-term risks identified by respondents are fairly similar to the short-term risks.
The pressing issues caused by COVID-19 mean that many key governments and decision-makers are struggling to prioritize long-term planning, and no longer have the capacity to help out with global issues. For example, the UK government postponed its foreign aid target until at least 2024. If countries continue to prioritize themselves in an effort to mitigate the impact of COVID-19, the inequality gap could widen even further.
Respondents also worry about rising debt levels triggering a crisis. The debt-to-GDP ratio globally spiked by 13 percentage points in 2020, a figure that will almost certainly continue to rise in the near future.
Respondents identified climate change as the biggest threat to humanity in the next decade.
Climate inaction—essentially business as usual—could lead to a global GDP loss between 4% and 18%, with varying impacts across different regions.
Experts also pointed out that current decarbonization commitments made at COP26 last year still aren’t enough to slow warming to the 1.5°C goal set in the Paris Climate Agreement, so more action is needed to mitigate environmental risk.
That said, efforts to curb climate change and solve long-term issues will likely have negative short-term impacts on the global economy and society. So risk mitigation efforts need to be in place as we work to reach net-zero and ultimately slow down climate change.
People’s thoughts on risk mitigation were gauged in the WEF survey. Respondents were asked to identify which risks our world is most equipped to handle, and which ones they believe we’re less prepared for. 
“Trade facilitation,” “international crime,” and “weapons of mass destruction” were risks that respondents felt we’ve effectively prepared for. On the flip side, “artificial intelligence” and “cross-border cyberattacks and misinformation” are areas where most respondents think we’re most unprotected against.
As society becomes increasingly reliant on digital infrastructure, experts predict we will see an uptick in cyber attacks and cybercrime. New AI-enabled technologies that offer ransomware-as-a-service allow anyone to engage in cybercrime—even those without the technical knowledge needed to build malware.
Based on the findings from this year’s survey, WEF identified five lessons that governments, businesses, and decision-makers should utilize in order to build resilience and prepare for future challenges:
The next few years will be riddled with complex challenges, and our best chance at mitigating these global risks is through increased collaboration and consistent reassessment.
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EV valuations have exploded since 2020, dwarfing those of legacy automakers like Ford and Toyota. Gain further insight with this infographic.
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The global push for lower emissions has created a mania around pure-electric automakers. While Tesla leads the charge, institutional investors have also piled into many of its younger rivals.
For example, in 2019, Saudi Arabia’s sovereign wealth fund invested $1.3 billion into Lucid Motors. One year later, it was revealed that Amazon had a 20% stake (worth $3.8B) in Rivian.
To see how quickly EV valuations have ballooned, we’ve visualized the historical market capitalizations (market caps) of 10 prominent automakers.
The legacy group includes five top traditional automakers, while the EV group includes the five most valuable pure-electric automakers that are listed on an American exchange.
The following table lists the market caps of these companies at various dates. While XPeng and NIO are listed on the New York Stock Exchange, they do not currently sell cars in the U.S.
Source: Companies Market Cap
At the end of 2021, Tesla and its four EV rivals were worth a combined $1.3 trillion. This was more than double of the legacy group, which was worth $635 billion. EV valuations have cooled since then, though Tesla is still the world’s most valuable automaker by a significant margin.
Comparing U.S. sales gives an interesting perspective on these companies’ relative scale. Once again, note that XPeng and NIO do not sell cars in America. We’ve provided figures for their home market (China) instead.
Source: Good Car Bad Car
Impressively, Tesla has overtaken Mercedes in the U.S. to become one of the country’s top luxury brands.
To satisfy investor expectations, Rivian and Lucid will need to rapidly scale their production and sales. Failing to do so could lead to significant stock price volatility.
Investors should also note that both companies could experience similar challenges as Tesla, which Musk has referred to as “production hell”. Rivian has already pushed back deliveries of its first SUV, while Lucid customers have been notified of delays due to “fit and finish” issues.
Nevertheless, these young manufacturers are setting some serious goals. Rivian aims to produce one million cars annually by the year 2030, while Lucid is targeting a more conservative 49,000 cars in 2023.
Tesla is still the undisputed EV leader, but competition is rapidly heating up.
On one hand, legacy automakers have been investing heavily in EV development, and new models are coming en masse. The Volkswagen Group is the biggest threat, selling 453,000 EVs globally in 2021 (up 96% over 2020). For reference, Tesla reported global sales of 936,000 in 2021.
On the other hand, Tesla must also defend its market share from an onslaught of Chinese entrants. This includes XPeng and NIO, which appear to be on similar trajectories. Both firms were founded in 2014, both sold nearly 100,000 EVs in 2021, and both have recently expanded into European markets. A U.S. expansion also seems to be imminent.
With the entire auto industry moving towards battery powered vehicles, will the market rethink its valuation of Tesla?
International trade has evolved drastically over the years. While China dominates now, the landscape was much different a few decades ago.
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Amidst supply chain issues and inflated shipping costs, global trade continued to grow last year, reaching an estimated $28 trillion in 2021—a 23% increase compared to the year prior.
Which countries are the central nodes of the global trade network? While China is currently the world’s largest trading partner, this hasn’t always been the case.
This series of graphics by Anders Sundell outlines the history of the world’s biggest trade hubs, showing how the landscape has evolved since 1960. Using netgraphs, each visual connects countries to their primary trading partner, using data that includes both imports and exports.
International trade has existed for millennia, and had previously been accomplished through famous trade routes like the Silk Road, which transported luxury goods from China to Europe since the first century BCE.
However, our story begins in the 1960s—just before containerization spread from the United States around the world, transforming global trade forever.
View the full-size infographic
In the 1960s, the U.S. was experiencing its post-war economic boom. Consumer spending was driving swift economic growth, and a rising middle class led to increased demand for luxury goods like TVs and cars. In response to this rising demand, U.S. factories that had been essential to the war effort swooped in quickly, and domestic production began to thrive.
Around the same time, legislation that encouraged international trade was being passed through Congress. In 1962, President John F. Kennedy signed the Trade Expansion Act into law, allowing the American government to negotiate massive tariff cuts with other countries. This ultimately led to the Kennedy Round two years later, which was a series of trade negotiations that resulted in lower tariffs and reduced barriers on exports for developing countries.
Across the pond, Europe was going through its own series of changes in the 1960s. While Britain was the most important player in trade in Europe at the time, the country was also struggling to recover from the financial burden of the two world wars.
Simultaneously, European countries were also banding together in an attempt to balance power and eliminate hegemony within Europe. In 1960, the European Free Trade Association (EFTA) was created, creating free trade agreements between Austria, Denmark, Norway, Portugal, Sweden, Switzerland, and the United Kingdom.
By 1990, the world’s international trade landscape was on the cusp of dramatic change.
View the full-size infographic
For starters, Britain’s global trade dominance had dwindled further, and a newly united Germany had stepped up to pick up the slack. Germany’s automobile industry started to expand rapidly around this time. In 1990, Germany exported 2.6 million cars worldwide, which was fewer than Japan shipped that year, but still enough to make Germany one of the most important trade hubs at the time.
1990 was also around the same time that China was starting to emerge as a global leader. The country’s economy had been picking up steam over the previous decade, thanks to a series of reforms brought on by then-leader Deng Xiaoping that were created to encourage foreign investment and boost international trade.
This new focus on economic growth in China spurred the rapid expansion of free trade zones in the country, which granted certain areas special liberties on importing and exporting goods.
Throughout the 1990s, China’s economic prosperity continued, and its role in international trade became increasingly significant. Finally, at the end of the decade, China became a member of the World Trade Organization, giving the country an unparalleled opportunity to establish itself further as a major global trading partner.
By 2020, China had overtaken the U.S. as the world’s biggest trade partner. But as the country’s influence grew, so did tensions between the U.S. and China.
View the full-size infographic
In 2018, the Trump administration set tariffs on more than $360 billion in goods, in an effort to encourage Americans to purchase domestic products. In response, China set its own tariffs on more than $110 billion worth of U.S. goods.
The conflict is still ongoing, and so far, there’s no clear winner in sight. The tariffs and trade barriers have hurt both countries, and with bilateral trade sputtering, many are left wondering if the peak of globalization is well behind us.
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