ELECTRIC VEHICLES Global electric vehicle markets poised for bumper growth in 2020s
Experts believe that the 2020s will be a pivotal decade for the proliferation and widespread adoption of electric vehicles after several years of problems and uncertainty for what is a truly transformative market.
For the first time ever in 2019, the combined annual sales of plug-in hybrids and battery electric vehicles (BEVs) hit the two-million mark. And before the COVID-19 pandemic caused major disruption to the automotive industry, electric vehicles (EVs) were slowly moving into the spotlight.
While this massive milestone may have been dwarfed by the ongoing pandemic and the economic uncertainty that it brings, the EV market will recover, and many analysts believe that its recovery will be nothing short of spectacular.
This is mostly thanks to the way OEMs have invested billions in areas like R&D, new electrified models, and factory redesign, efforts which are paving the way for future EVs to become a more accessible and viable alternative for the average consumer, whose own attitudes have changed.
Then vs now
Before looking at the coming decade, it’s worth casting our minds back 10 years to the start of the 2010s.
Back then, EVs typically had a very short range of 80 to 100 miles. This meant that overnight charging was a daily necessity for drivers who wanted to use an EV as a daily runner. Should a driver have come home from a hard day at work, forget to plug their car in, and then fall asleep, a rude awakening would have been on the horizon when they woke to realize their error. And if a driver wanted to use their car for a long journey, they would have had to keep dreaming: low range and inadequate charging infrastructure made this nigh impossible outside of major cities.
Looking at the situation today then, it’s clear that a lot has changed, and we have major advances in battery technology to thank for this.
These days, the average range of an EV is 250 miles, with some vehicles such as the Tesla Model S now pushing past the 400-mile mark. This means that the average driver could use their EV for an entire week or more before needing to recharge it either at the home or a public fast charging point, and there are plenty of these to choose from.
It’s no wonder then that EVs are quickly being seen by consumers as a more realistic and viable product. Their adoption is quickly increasing, a point illustrated by the fact that Tesla’s market cap hit $100 billion for the first time in early 2020 and ended the year at six times this amount at over $600 billion, making the company worth as much as the combined market cap of the nine largest car companies globally.
So, what’s in store for the coming decade?
The decade of the electric vehicle?
According to Allied Market Research (AMR), the European electric vehicle market will hit $143.08 billion by 2027, representing a compound annual growth rate (CAGR) of 25.4%. According to AMR, this will be the result of a surge in demand for high-performance, fuel-efficient, and low-emission vehicles along with tightened government regulations, such as measures to ban petrol and diesel cars in the UK by 2030.
On the other hand, the high cost of manufacturing EVs and putting the necessary infrastructure in place throughout Europe has the potential to impede this growth to some extent. It may well end up being the case that some markets will be unable to support the EV transition in the same way that wealthier nations will, even in Europe.
With widespread EU-backed government initiatives well underway, in addition to the swathes of technological advancements that are undoubtedly on the horizon and multi-billion capital investments from governments and private firms, the reality is that European EV market growth may surpass all expectations and stretch beyond even the most liberal of today’s estimates.