Last year was a ground-breaking year for the industry, with Europe overtaking China first as the center of the global electric car market. While global car sales slumped last year as a result of the pandemic, electric vehicles bucked the trend. Registrations of electric cars rose by 41% in 2020, despite a 16% drop in global car sales.
Battery prices for electric vehicles have fallen dramatically over the last 15 years, exceeding many previous projections that electric vehicle sales would accelerate. An increase in the number of available different electric car models on the market and a 370% drop in battery price have led consumers to spend 50% more on electric cars, namely $120 billion by 2020. Global sales of electric cars now exceed 3 million, with registrations in Europe almost doubling to 1.4 million and registrations in China rising by 1.2 million.
The dramatic drop in battery prices will allow leading automakers to sell electric vehicles for less than gasoline and diesel cars by 2022. While electric cars have played a good role in the past, there is a consensus among Automotive Industry executives and analysts that a tipping point is approaching when mass adoption is inevitable owing to declining battery prices, pressure from regulators and generous government subsidies. Governments and companies have announced commitments to an all-electric future.
Other experts are even bolder in forecasting market share as they are imagining a market in which most new car sales will be electric cars. Earlier this week, Tesla predicted the end of the ice for the era of internal combustion engines, predicting that global new cars will have 20% fewer plug-in hybrids by 2025 and 50% fewer plug-ins and hybrids by 2030. Alex Guberman of e-Electric takes a similar view, predicting that electric vehicles will account for 50% of the market by 2030.
This is a massive increase compared to the expectations of leading data provider IHS Info Markit, which says that by 2030, 18.1% of global car sales will be electric battery (BEV), up from 12.1% in 2025. In the European Union (EU), IHS expects BEV sales to rise to 19.9% by 2025 and to 30% by 2030 – the idea that 70% of all European vehicle sales (and those of the VW brand) will be electric is also a massive departure from conventional wisdom. Most mainstream forecasters are closer to IHS than VW or UBS, but even if their optimistic forecasts become reality, there are still massive hurdles to overcome.
In Europe, where around 25 percent of the market this year will be eletronized, many new vehicles coming on the market rest on special platforms designed from the beginning for battery-electric power. As such, they must be compromised, said Fabrice Cambolive, senior vice president of sales and operations for the Renault brand. Most consumers won’t come to the showroom to buy an electric car, and even when gasoline prices are low, hybrid models are hard for dealers to sell, industry analysts say.
With the full electric effect and established brands committed to offering a wide range of all-electric cars, the future hinges on diesel sales stalling before the 2030 cut-off date when some regions, such as the UK, stop selling combustion vehicles.
EDC vehicles account for only 3% of new-car sales and are largely driven by Chinese early adopters and enthusiasts who are different from the mainstream consumers who do not drive environmentally or technology-oriented lifestyles and have other priorities and constraints. Breakthroughs in lithium-ion technology are facing even greater challenges and longer lead times, so the automotive industry does not expect them in the next decade in your car. By and large, cheap batteries alone will not be enough to make electric vehicles widespread, even if we achieve our battery targets.
According to Tustin-based research firm Autopacific, sales of electric vehicles in the US could quadruple over the next five years, rising from 18% of car sales in 2020 to 7% in 2026. To curb global warming, policymakers say that we need to shift from gas-powered vehicles to clean, environmentally friendly electric vehicles. Major automakers plan to do just that, promising a full range of electric vehicles by 2030.
The US Department of Energy predicts a five to ten-fold increase in global demand for electric vehicles by 2030. Ford will double its investment in electric vehicles to $2.2 billion by the end of 2025. By 2030, two-thirds of Ford’s commercial vehicle sales are expected to be electric or plug-in hybrids, and the company recently announced a partnership with Volkswagen to meet its electric car target.
There are fears that the production of electric cars and batteries will cause more CO2 emissions than the construction of traditional vehicles. To address this problem, electric vehicle manufacturers are taking various steps, including reducing the use of harmful energy crops. Elected officials in Europe also regulate exhaust emissions.
The next battery-electric vehicle will be the F-150 pickup truck in early 2022. However, the adoption of battery-powered vehicles in the US is proceeding slowly compared to its competitors. Despite their disadvantages, electric cars produce less harmful emissions over their lifetime than gas-powered cars.
In Europe, Ford’s entire car program will run on batteries by 2030. This week, the automaker pledged to spend $1 billion overhauling its Cologne plant, which is the base for electric vehicle production. The electric car Volkswagen ID3 in one of the delivery towers of the car manufacturer Autostadt near the VW headquarters in Wolfsburg.
Kia has also confirmed that a new battery-electric vehicle of the next generation will be announced in early 2021. It will sit with a crossover-inspired design and range of 500 km on the e-GMP platform. This is the first launch under the new Kia brand, closely linked to the upcoming Hyundai Ioniq 5. It is the first in a new series of the company’s electric cars to slip into the popular crossover range.
Electric cars still make up a small part of the new car market, but they are used in this exciting area of vehicle development. Prices are falling, models are diversifying, and all this goes hand in hand with increased investment in the expansion of store networks. Let’s take a closer look at what you can expect from the road over the next few years.
The future seems bright for the electric vehicles.
