Electric vehicle sales to fall drastically in 2020

Electric Vehicle

According to the latest annual Long-Term Electric Vehicle Outlook, published by BloombergNEF (BNEF), sales of electric vehicles are forecast to fall 18% in 2020, to 1.7 million worldwide, due to impacts of COVID-19 on the industry’s growth. Sales of combustion engine cars are set to drop even more (by 23%); however, long-term electrification of transport is projected to accelerate in years ahead.

The report shows electric models accounting for 58% of new passenger car sales globally by 2040, and 31% of the whole car fleet. Also, 67% of all municipal buses on the road by that year, plus 47% of two-wheelers and 24% of light commercial vehicles.

The figures have major implications for oil and electricity markets. Transport electrification, particularly in the form of two-wheelers, is already taking out almost 1 million barrels of oil demand per day and by 2040 it will remove 17.6 million barrels per day. Electric vehicles (EVs) of all types are seen adding 5.2% to global electricity demand by 2040.

BNEF’s analysis suggests global sales of internal combustion engine (ICE) cares peaked in 2017 and will continue to decline after a temporary post-crisis recovery. BNEF sees overall new passenger vehicle sales peaking in 2036 as increased urbanization and more shared mobility through the fleet size keeps growing. Electric models are accounting for 3% of global car sales in 2020, rising to 7% in 2023, at some 5.4 million units

Further falls in lithium-ion battery prices will result in lifetime and upfront costs of an electric vehicle “Ëœcross-over’ with those of ICE equivalents around 2025. The date will vary depending on the market, as early as 2022 for large cars in Europe but 2030 for small cars in India and Japan.

This year breaks new ground on electric two-wheelers and fuel-cell vehicles, using hydrogen. The latter technology accounting for 3.9% of heavy-duty commercial vehicle sales and 6.5% of municipal bus globally by 2040, with higher shares in East Asia and Europe.

The report sees fully autonomous vehicles (“Ëœrobotaxis’) beginning to play a larger role in late 2030’s, helped by advanced drive assistance systems (ADAS) and the build-out of sensor supply chains.

BNEF estimates that home, workplace and private commercial charging will account for 78% of this investment, as investment in public charging infrastructure is estimated at $111 billion globally by 2040. Most of which can be provided by the private sector as utilization rates rise in the 2020s.

Currently, there are over 7 million passenger EVs, 500,000 e-buses, almost 400,000 electric delivery vans and trucks and 184 million electric mopeds, scooters and motorcycles on the road globally. Most e-buses and electric two-wheelers today are in China.

The report also discusses the impact that COVID-19 will have on public transit. There is likely to be lasting reduction in ridership of municipal bus and metro services. Shared mobility operators have suffered but hope to rebound quickly.

Colin McKerracher, head of advanced transport for BNEF, commented, “The COVID-19 pandemic is set to cause a major downturn in global auto sales in 2020. It is raising difficult questions about automakers’ priorities and their ability to fund the transition. The long-term trajectory has not changed, but the market will be bumpy for the next three years.”

Aleksandra O’Donovan, head of electrified transport for BNEF, said, “We estimate that the world will need around 290 million charging points by 2040, including 12 million in public places, involving cumulative investment of $500 billion.”

Figure 1: Global annual passenger vehicle sales by drivetrain
Figure 2: Global share of total annual passenger vehicle sales by drivetrain

Source: BNEF. Note: Electric share of annual sales includes battery electric and plug-in hybrid.

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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