E-cars in the US, China and Europe have a bright future — even in the near term — as automakers are looking to do away with cars propelled by internal combustion engines (ICEs). This comes as countries, across the world, plan to whittle down fuel emissions by introducing electric vehicles (EVs).
EVs and hybrid electric vehicles (HEVs) are climbing a steep incline. If this continues to be the trend, JP Morgan said that by 2025, EVs and HEVs could be around 30 per cent of the total number of vehicles sold.
This figure for EVs could spurt to 40 per cent of the market share by 2030. In 2017, less than one million vehicle sales — or roughly 1 per cent of global auto numbers — were plug-in electric vehicles or PEVs.
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| An EV at a charging station |
According to JP Morgan, this will surge to close to 8.4 million vehicles or about 7.7 per cent of the market share globally by 2025.
Meanwhile, HEVs — cars that are a combination of a fuel engine and battery — could see a surge from just 3 per cent of the global market share around 2017 to more than 25 million vehicles or 23 per cent of global sales by 2025.
In the case of North America and Europe, hybrids and battery electric vehicles or BEVs could lead the charge in the next decade as plug-in hybrids are finding fewer takers, according to JP Morgan.
It said in Europe, BEVs and plug-in electric vehicles (PHEVs) will rise from roughly 2 per cent of total sales in 2017 to around 9 per cent by 2025.
Over the time period (2025), JP Morgan sees sales of PHEVs in Japan and South Korea touching around 384,000 units, which will be a market share of 6 per cent of the total. HEVs could see 1.8 million vehicle sales or 27 per cent of total sales.
However, in the US, stringent fuel economy regulations may prod automakers to ramp up their EV offerings rather than HEVs.
However, it may not be with the same degree of urgency as in Europe, where there are carbon dioxide emission targets and fines.
According to Deloitte, China dominates the EV market and accounted for half of all EV sales in 2019.
Sales in the second half of 2019 had fallen in the country as some subsidies were cut by 50 per cent. PHEV sales slid 9 per cent and BEV sales fell to a 17 per cent growth rate from 2018.
But, according to our estimates, China could see its EV market surge, maybe to 50 per cent by 2030.
In the US, Tesla Model 3 alone revved up the EV market, clinching 50 per cent of total EV sales in 2019. In the second half of 2019, according to Deloitte, falling fuel prices had helped ICE sales whereas EV numbers had fallen.
But we feel that the US EV market will surge to 40-45 per cent of all vehicle sales by 2030.
Like Europe and China, US car sales fell sharply in the first three months of 2020 as Covid took a toll on demand. But, we feel, with Brent crude surpassing $100 a barrel in March 2022, ICE car sales could see a big dent and this is set to come as a boon for the EV segment.
In 2019, the United Kingdom and a few other countries in Europe had seen triple-digit growth in EV sales.
And, with the UK’s all-electric policy, we feel EV sales could rev up to nearly 30 per cent of all sales in the near future, that is, in five years. And in a decade, this number could touch 50 per cent.
According to McKinsey and Company, Europe is mainly a regulation-driven market with high subsidies, but in China, consumer pull is robust despite a cut in incentives.
In the US, EV sales have seen tepid growth because of limited regulatory pressure and consumer interest. But things may change, post 2022.
On the future of electric vehicles globally, McKinsey added that EVs would need to account for 75 per cent of passenger car sales by 2030 — which outpaces the current growth of the industry — and this would pave the way for taming global warming to a great extent.
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