More than $1 trillion is being invested by the automotive industry in a revolutionary switch from internal combustion engines to software-controlled electric vehicles. Automakers and government decision-makers have embraced the promise of electric cars to offer greener, safer transportation from Detroit to Shanghai. 2035 has been established as the cutoff date for the sale of new combustion-powered passenger vehicles by European nations and California.
The Industry Rulers
Established manufacturers like Toyota Motor Corp (7203.T) and Volkswagen AG (VOWG p.DE) that were formerly hesitant to go electric have been humbled by Tesla Inc’s (TSLA.O) surge to become the world’s most valuable automaker after reaching a $1 trillion value last year.
The world’s major markets will see a surge of new electric vehicles beginning in the next year, ranging from pickup trucks to middle-class SUVs and sedans.
Industry leaders and forecasters disagree on how quickly electric vehicles might supplant conventional vehicles in even half of the world’s auto market.
Battery electric vehicles occupy around 21% of the market in China, the largest automotive market worldwide. A little under 12% of all European passenger vehicle sales are electric vehicles. But the US’s market share of electric cars is currently around 6%.
Hurdles to be Incurred
Industry executives and analysts identified several obstacles to EV adoption, including a lack of public fast-charging infrastructure and the rising cost of EV batteries. This results from a shortage of essential materials and uncertainty regarding government subsidies, which have boosted EV purchases in important markets like the United States, China, and Europe.
According to AutoForecast Solutions, by 2029, electric vehicles may make up around 26% of all cars produced globally and a third of the North American market.
According to AFS President Joe McCabe, sales of electric vehicles are unlikely to rise in a straight line. The adoption of EVs will be slowed if there is a recession next year, as many economists predict.
In 2027, combustion vehicles are expected to account for just under 80% of sales in North America, according to Wards Intelligence. Wards analyst Haig Stoddard stated at a recent conference that manufacturers “expect strong ICE (internal combustion engine) volume heading into the next decade.”
Deployment of electric vehicles till 2025
According to the most recent EY Mobility Consumer Index, which was covered by Electrek last week, 52% of consumers worldwide are interested in purchasing EVs (MCI). It signifies a rise of 22% points in just two years, and it is the first time that 50% has been surpassed.
The conclusions of BloombergNEF are in line with those of the EY study, as BloombergNEF predicts that the adoption of electric vehicles will continue to multiply through the year 2025 due to growing global legislative pressure, the availability of more electric car models, and rising customer demand.
Sales of plug-in cars are expected to increase from 6.6 million in 2021 to 20.6 million in 2025, according to a Bloomberg NEF forecast. Plug-in vehicle sales are expected to increase from slightly under 10% in 2021 to 23% of new passenger car sales globally in 2025. Of those, 75% will be entirely electric.
The researchers don’t envision plug-in hybrids earning a sizable market share outside of Europe, and they project that their global sales will peak around 2026.
Sales of fuel cell vehicles are anticipated to rise significantly due to efforts in China, but generally, they won’t have appreciable effects on the passenger vehicle market.
It is anticipated that the US market will lag somewhat. It is expected to increase from 2023, but in 2025, it will likely only account for 15% of the worldwide electric vehicle market. According to the EY study, customers in Australia (38%) and the US (29%) are the least committed to converting to electric vehicles.