- According to new analysis by market researcher Wood Mackenzie, global EV sales are estimated to drop by 43% yoy to 1.3m by the end of 2020.
- This is due to a combination of factors.
- the coronavirus pandemic which has slowed EV demand and seen some automakers put cars on hold to shift their efforts to manufacturing medical equipment.
- Lower oil prices and EV launch delays have lead to a “wait-and-see” approach to buying EVs.
- China’s EV sales (which have accounted for c. 5% of all vehicle sales in the past two years) were down sharply at the start of this year.
- Interestingly, a reverse trend was found in Europe, were EV sales surged by 121% in January (the first European COVID-19 case was reported in late January).
Analysis and Comments
- Most experts are expecting global EV sales contraction of 40% in 2020 but expect a sharp recovery in 2021.
- Interestingly, more states in the US are adopting EV mandates in retaliation to the easing of emission targets for automotive OEMs by the Trump administration a few weeks ago: Washington has adopted California’s Zero Emission Vehicle (ZEV) Program regulations and targets. The ZEV program requires the automotive OEMs to increase their EV car sales so that they can generate ZEV credits (which are dependent on EV driving range and the number of EVs sold as a % of car sales). The ZEV credit target increases from 4.5% in 2018 to 22% in 2025. Four other states in the US are expected to follow suit.
- While the EV sales contraction in China continued in March’20 with EV sales declining in 49% yoy, Renault made headlines yesterday by announcing they have decided to stop the production of ICVs in China by withdrawing from its JV with Dongfeng. It will now fully focus on EVs and commercial vehicles in China.
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Surely all vehicle sales are going to drop?
At least in the short term I believe.