EV Global Outlook 2021 – Analysis

There were 10 million electric cars on the world’s roads at the end of 2020, after a decade of rapid growth. Electric vehicle registrations increased 41% in 2020, despite the pandemic-related global downturn in vehicle sales as global vehicle sales fell 16%. About 3 million electric vehicles were sold globally (4.6% sales), and Europe overtook the People’s Republic of China (“China”) as the world’s largest electric vehicle market for the first time. Registrations for electric buses and trucks have also expanded in key markets, reaching global stocks of 600,000 and 31,000, respectively.

The resilience of electric vehicle sales in the face of the pandemic rests on three main pillars:

  • Supportive regulatory frameworks: Even before the pandemic, many countries were promoting major policies such as carbon dioxide2 Emissions Standards and Zero Emission Vehicle (ZEV) Authorizations. By the end of 2020, more than 20 countries had announced bans on conventional vehicle sales or imposed all new sales on ZEVs.
  • Additional incentives To protect electric car sales from an economic downturn: Some European countries have increased purchase incentives and China has postponed the phasing out of its subsidy plan.
  • The number of electric vehicle models expanded and the cost of the battery continued to fall.

Automakers have announced increasingly ambitious plans for electrification. Among the world’s 20 largest car manufacturers, which accounted for about 90% of new car registrations in 2020, 18 have announced plans to expand their model range and rapidly increase production of light electric vehicles. Availability of heavy-duty electric vehicle models is also expanding, with four major truck manufacturers pointing to an all-electric future.

Consumer spending on electric vehicle purchases rose to $120 billion in 2020. In parallel, governments around the world spent $14 billion to support electric vehicle sales, up 25% from 2019, mostly from strong incentives in Europe. However, the share of government incentives in total spending on electric vehicles has declined over the past five years, indicating that electric vehicles are becoming increasingly attractive to consumers.

The near-term outlook for electric vehicle sales looks bright. In the first quarter of 2021, global electric vehicle sales rose by about 140% compared to the same period in 2020, driven by sales in China of about 500,000 and in Europe of about 450,000. The first quarter of 2020, albeit from a much lower base.

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