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ELECTRIC VEHICLES Electric vehicle market sales to fall to 24 million in 2020

Author / Editor: Luke James / Johanna Erbacher

The latest forecasts from IDTechEx say that the total sales for 2020 in the electric vehicles market across land, sea, and air will drop to 24 million because of the impact of COVID-19, representing a 19 % year-on-year decline.

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Electric vehicle market 2020: As a result of the COVID-19 pandemic, IDTechEx forecasts that total sales of electric vehicles will decrease by 19% to 24 million.
Electric vehicle market 2020: As a result of the COVID-19 pandemic, IDTechEx forecasts that total sales of electric vehicles will decrease by 19% to 24 million.
(Source: gemeinfrei / Unsplash)

The Electric Vehicles (EVs) market across land, sea, and air will only achieve 24 million unit sales this year, representing a 19 % year-on-year decline due to the impact of the ongoing COVID-19 pandemic. This is despite ‘Big Four’ firm Deloitte adjusting up its 2030 EV market forecasting by 10 million in July of this year.

Urbanized vehicles such as electric cars and two-wheelers currently have the highest unit volume, battery demand, and motor demand. However, they’re also bearing the brunt of the pandemic’s impact as consumer-driven markets continue to suffer heavily.

Huge demand from two-wheelers

In fact, it is two-wheelers that are making up the majority of this demand. The volume of the electric two-wheeler market represents just over 90 % of the 24 million sales, with most of this volume coming from China.

Although this may seem surprising to some, consumer purchasing power has surged in China in recent years, and electric two-wheelers were the vehicle of choice for urban mobility: The market peaked at 30 million sales in 2016 following 20 years of growth, falling to 26 million in 2019.

Despite accounting for this huge figure of unit sales today, Li-ion battery demand from two-wheelers only makes up 11 % of the market due to the very small battery sizes in these two-wheeler vehicles in addition to the dominance of lead-acid batteries in the Asian micro-mobility market. This is quite the contrast to electric cars which, despite only making up 7 % of EV unit sales, account for 70 % of the battery demand.

The impact on BEVs and PHEVs

The question that everyone wants an answer to is how Battery Electric Vehicles (BEVs) and Plug-in Hybrid Electric Vehicles (PHEVs) been impacted in 2020. After all, the consumer electric cars market is expected to grow substantially throughout this decade, with commentators’ latest estimates being that there will be 245 electric four-wheelers on the road by this time.

A chart representing BEV and PHEV cars, vans, trucks, buses and E2W, and BEV, PHEV and HEV boats, ships, and aircraft.
A chart representing BEV and PHEV cars, vans, trucks, buses and E2W, and BEV, PHEV and HEV boats, ships, and aircraft.
(Source: Electric Vehicles: Land, Sea, and Air 2021—2041, IDTechEx.)

Logic would suggest that the ongoing COVID-19 pandemic and a looming global recession will increase consumer price sensitivity, meaning fewer people will be inclined to make a purchase as large and somewhat non-essential as an electric car.

However, a backlog of orders for popular models such as the Tesla Model 3 - the world’s most popular EV - and less price sensitivity from today’s electric car demographic (overwhelmingly wealthy, professional, middle-class individuals), along with government-backed incentives such as tax relief, has meant that sales have shown an element of resiliency in Europe and the United States. During the height of national lockdowns, the needle barely moved.

The report says that there is much uncertainty around whether this position is sustainable, though. With the constant threat of a ‘second wave’ and further disruptions caused by new lockdowns, we can only wait and see what happens over the next few months and well into next year.

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