World EV Day: EV Market Closing Gap with ICE Vehicle Market

It is that time – September 9, World EV Day. The day is marked as a significant event for the world that looks towards a future of clean transport. World EV Day is a global movement, a day of celebration of e-mobility, and a day to shift the transition to sustainable transport with consumer, business and policy outcomes. With the rise of the EV market as a substitute for conventional fossil fuel-based mobility and the world moving towards a carbon-neutral future, it is interesting to see how the EV market has bloomed and anticipate what it holds in store for us.

Interest in EVs Translating into Numbers

Sales of Electric vehicles (EVs) have increased tremendously over the past decade. Thanks to the falling lithium-ion battery pack costs, better range, battery life, efficiency, and overall affordability. The year 2021 was a record-setting year as EV sales doubled to around 6.9 million EVs worldwide. Comparatively, the sales each week in 2021 were equivalent to what was sold in the whole of 2012, according to the latest edition of the annual Global Electric Vehicle Outlook. In the last month of December alone, an EV sale of 907,000 was a 60 per cent uptick from the same time in 2020. The EV market grew substantially in recent years. The total number of electric cars on roads by the end of 2021 was about 16.5 million, triple the amount in 2018.

The current year 2022 also carried on with these positive sentiments as the market continued to grow so far – for the first two quarters. The year witnessed roughly two million EV sales worldwide in the first quarter. This was an increase of about 79 per cent Y-o-Y out of which BEVs shared 73 per cent and PHEVs the rest, as per Counterpoint’s Global Electric Passenger Vehicle Model Shipments Tracker. The sales grew 61% Y-o-Y to reach 2.18 million units in Q2 2022 as China remained the leader in the markets.

Region-wise EV Market Summary

The Asia-Pacific region was the leading market for battery electric vehicles, propelled by the Chinese new energy vehicle market. Moreover, China, Europe, and the United States, together accounted for a staggering 90% of electric car sales.

The state of major markets for EVs is the litmus test for EV growth and prospects. On this World EV Day, let’s have a look at the state of major EV markets across the globe.

China

China is the biggest market of EV in the world. As per some forecasts, China, with the highest number of electric vehicles in use and will continue to produce the biggest volume of electric vehicles in the Asia-Pacific region (and, in the world) in 2023.

Nearly 3.4 million electric vehicles (tripled from a year earlier) were sold in 2021 in China alone, half of the global sales. This growth in the Chinese EV sales was also significant as it was more than the entire global sales in the year 2021. China remained the market leader in Q2 of 2022 as its sales saw a growth of around 92 per cent Y-o-Y for the quarter as it reached 1.24 million units from just 0.64 million units in Q2 2021. Alongside China, the key leaders from the Asian region include the likes of South Korea (114,500 sales) and India (mainly for the two-wheeler electric segment).

Europe

Europe as a single market closely followed China as the world’s second-largest EV market. Sales grew strongly in Europe – increasing by 65% to 2.3 million in 2021. Although the pandemic decreased the y-o-y growth when compared to 2020, it was still impressive as the EVs increased their share in the automobile market. Markedly, the sales in December 2021 surpassed that of diesel vehicles for the first time.

Expectedly, the countries with the largest market share, in Europe last year were Germany (25%), the United Kingdom and France (both around 15%), Italy (8.8%) and Spain (6.5%). Norway saw one of the most outstanding (if not the most) performances in terms of EV adoption. The EV share of the new sales was over 80 per cent, even as ICE vehicles are set to stop selling by 2025.

The Europe electric vehicle market was valued at $25,489.81 million in 2019 and is projected to reach $143,084.57 million by 2027, registering a CAGR of 25.4% from 2020 to 2027.

The United States

In the US, sales doubled in 2021 compared to the year earlier as the market crossed 630,000 EV sales with a share of 4.5 per cent of global. EV major Tesla dominated over half of the country’s EV market, even as its total share in the market declined from the previous years. The US EV market is projected The U.S. electric vehicle market is projected to grow from $28.24 billion in 2021 to $137.43 billion in 2028 at a CAGR of 25.4% in the forecast period 2022-2029.

India

Indian EV market shows a positive growth trajectory as it is evolving at a fast pace. In 2021, about 0.32 million EVs were sold in India – an increase of 168 per cent Y-o-Y. Notably, the two-wheeler segment forms the majority of the Indian EV market as the nation aims to replace ICE vehicles in other segments as well. NITI Aayog aims to achieve EV sales penetration of 70% for all commercial cars, 30% for private cars, 40% for buses and 80% for two and three-wheelers by 2030. According to an independent study by CEEW Centre for Energy Finance (CEEW-CEF), the EV market in India will be a US$206 billion opportunity by 2030 if India maintains steady progress to meet its ambitious 2030 target.

The major Indian players in EV segment are Hero Electric, Okinawa and Ather Energy – all of them are two-wheeler EV manufacturers. The passenger vehicle segment is driven by the likes of Tata Motors and MG Motor. Indian market may soon see launch of EV models by other manufacturers as well.

Cheers for World EV Days Ahead

As the world treads on the path of a carbon-neutral future, the share of EVs will go on rising as the technology replaces conventional fossil fuel-based vehicles. Few challenges remain that hinder EV growth worldwide. In short term, the greatest obstacles to continued strong EV sales are soaring prices for some critical minerals essential for battery manufacturing, as well as supply chain disruptions caused by Russia’s attack on Ukraine and by continued Covid-19 lockdowns in some parts of China. In the longer term, greater efforts are needed to roll out enough charging infrastructure to service the expected growth in electric car sales, the report says.

The government policies and the industrial actions inspired by them will play a phenomenal role in clearing the bottlenecks and boosting EV sales further. Chasing the individual targets of countries and companies of phasing out sales of internal combustion engine cars within the next two decades will be a driving encouragement to achieving emission-free mobility sooner.

As per one forecast, the size of the global EV market may increase over four-fold to reach a global market size of around 1.4 trillion USD by 2027. For fruition, the world will have to clock a CAGR of more than 19.19 per cent between 2022 and 2027. A lot has been achieved in the EV world, but an EV-dominated mobility world remains an unachieved goal and a topic of discussion for World EV Days to come ahead.