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When a final tally is confirmed, global sales of battery
electric vehicles (BEV) and other EVs are expected to have reached
nearly 2.5 million in 2020, according to IHS Markit, and then rise
by about 70% in 2021.
For 2021, China and Europe will account for the largest market
shares by far, with China at about 44% and Europe at nearly 28%.
Lagging behind are North America with a 16% share, and a combined
Japan/South Korea share of 11%.
In 2025, global sales will top 12.2 million, indicating annual
growth of nearly 52% (compounded), IHS Markit said in its December
forecast.
In Europe, EV sales have been, and will continue to be, boosted
by regulations that set a requirement for each manufacturer's
light-duty fleet to average carbon emissions of no more than 95
g/km CO2. Because companies can earn and trade credits,
sales of EVs are critical to balancing emissions from other
vehicles. In the most recent month for which full data are
available, October 2020, IHS Markit reported that Europe BEV sales
climbed to nearly 7% of the total, which is "aiding all major car
manufacturers in minimizing potential gap-to-compliance."
More European regulatory support for zero-emission vehicles is
coming, said Vijay Subramanian, IHS Markit CO2
compliance director, automotive. "Under the Green Deal framework,
the 2030 passenger car carbon dioxide target is expected to get
more stringent compared with the current legislative requirement of
37.5% carbon dioxide reduction from 2021 levels," he said.
Looking more closely at one of the top markets for EVs in
Europe, the German Federal Motor Transport Authority (KBA) reported
on 7 January that EVs, plug-in hybrids, fuel cell, natural gas, and
hydrogen vehicle sales accounted for 22% of the overall market in
2020. The number of registered BEV passenger cars more than tripled
year on year (y/y) to 194,163 units.
Volkswagen achieved the highest overall BEV market share in 2020
of 17.4% (up 609% y/y), followed by Mercedes-Benz with a share of
14.9% (up 500%) and Audi (9.0% share, up 608%), KBA said in a
release. In terms of BEV passenger cars, VW had the largest share
of new registrations, at 23.8%, followed by Renault (16.2%) and
Tesla (8.6%).
"In terms of the overall market picture, the share of passenger
cars with alternative drives increased from 2.4% in 2019 to a share
of 3.6% in 2020…. For pure BEVs, this trend was even more
pronounced, with market share rising from 0.5% in 2019 to 1.2% in
2020. The combined 2020 market share for cars with an electric
drive (battery-electric, plug-in, fuel cell) in Germany stood at a
record high of 13.5%," KBA said.
Chinese growth to ramp up again
China's growth in EVs is driven by general economic demand and
by the phasing in of new energy vehicle requirements since 2018.
IHS Markit said the regulations enable Chinese automakers to meet
their annual new vehicle efficiency standards by purchasing
emissions credits that are generated by the sale of EVs, with the
rate of credit higher for vehicles with advanced performance such
as greater battery efficiency or range, but lower for plug-in
hybrids.
While the COVID-19 pandemic slowed sales growth in 2020 to a
modest 3% gain, IHS Markit said that double-digit gains will return
in 2021 and beyond. "In 2025, [China's] BEV production volumes are
expected to reach 4.8 million units, taking a market share of 17%,
while plug-in hybrid vehicles volumes are forecast to reach around
1.6 million units, taking a market share of 6%," wrote Abby Chun
Tu, IHS Markit principal research analyst.
One possible damper on growth in 2021 and going forward is a
policy announced in late December by China's Ministry of Finance
that will see tax breaks for buyers of EVs reduced by 20% from last
year's level, or about $550 on average.
Japan to boost investment
Japan announced on 8 January new support for EV production and
sales as it seeks to implement a mandate that all new car sales
beginning in 2030 be EVs, a key step in meeting its 2050 net-zero
carbon emissions pledge.
The Green Growth Strategy includes an R&D fund of 2 trillion
yen (about $19 billion) for investments to advance battery
technology and reduce the cost of manufacturing batteries to 10,000
yen/kWh ($96) or less by 2030. Carmakers would be one of 14
targeted industries to receive tax incentives for the transition.
Recognizing that the plan to transform transportation and
manufacturing to all-electric service (where possible), the Green
Growth Plan also includes investments to meet rising need for
electricity, which Japan said will increase from 2020 levels by
30-50% by 2050.
US awaits Biden policies
US EV sales are harder to forecast because of the change in
administration to President-elect Joe Biden. The Trump
administration's policies generated "headwinds" for EV sales, Xi
Wang, IHS Markit powertrain analyst, wrote in the company's
forecast report. This included the US Environmental Protection
Agency's April 2020 Safer Affordable Fuel-Efficient Vehicles Rule,
which rolled back Obama administration rules finalized in 2012 that
carbon dioxide emissions from cars and light trucks would have to
be reduced by 5% per year. The Trump rule requires carbon dioxide
reductions of 1.5% annually for model years 2021-2026, which can be
met with much lower numbers of EV sales than automakers have used
to meet fleet targets.
Also, Biden is expected to withdraw from a lawsuit over
California's vehicle emissions standards that are more strict than
federal standards, and thus incentivize EVs. Under the federal
Clean Air Act, California can apply for a waiver of federal
preemption that prohibits states from enacting tougher emissions
standards, and if that waiver is approved, other states can choose
to adopt California's standards. The Trump administration revoked a
previous waiver—the first time that's been done—and
California has sued to have it reinstated.
"With the incoming Biden administration, the possibility of the
US rejoining the Paris Climate Agreement and California waivers
being reinstated may well incentivize BEVs in the US market sooner
rather than later," said Wang.
On the other hand, California showed this month that it
potentially can have a significant impact on the EV sales curve
regardless of federal policy. On 6 January, California Governor
Gavin Newsom proposed a fiscal year 2021 budget that includes $4.5
billion of new spending to help the state recover from the economic
recession caused by the COVID-19 pandemic. One-third of that total,
or $1.5 billion, would consist of tax breaks for individuals and
businesses to purchase EVs or hydrogen vehicles and equipment, and
to invest in the construction and maintenance of electric charging
and hydrogen fueling infrastructure.
The spending bill also includes up to $300 million to install EV
chargers at every state-owned facility where vehicles are parked or
serviced.
California already is committed to ending sales of new
light-duty internal combustion engine vehicles in 2035.
