The Rising Trends of Electric Vehicles

The automotive sector these days is undergoing a rapid transformation as most automakers are turning to electric vehicles (EVs). Carmakers are now launching various new models with a hefty focus on electrification. Along with hybrid models, many automotive companies are started to introduce a diverse type of EVs, from e-Scooters to city cars and large SUVs. These kinds of vehicles are sophisticated and diversified, with many price and style options.

According to McKinsey EV index, first time global sales of new electric vehicles crossed 1 million units last year. And this could be expected to quadruple by 2020, with 4.5 million units, around 5 percent of the overall global light-vehicle market.

China Stays on Top in EV Sales

China has a large electric vehicle market, mainly Battery Electric Vehicles (BEVs), compared to Europe and the US combined. The market in the country is currently dominated by domestic OEMs, with a sales share of nearly 94 percent. Also, substantial subsidies and robust regulation continue to drive much of the growth.

To promote and encourage EVs in the country, some Chinese cities conduct license-plate lotteries and auctions. The government last year decided to introduce green license plates for new EVs, after a successful pilot program in selected cities. In the year 2018, the sales of electric cars were more in China than the rest of the world combined. The Chinese government even has spent around US$60 billion in the last decade to create an industry that develops EVs, while minimizing the number of licenses available for gasoline-powered cars to boost demand for electric cars.

Moreover, China has 99 percent of the world’s 250 million electric two-wheelers, which is nearly 100 times the total number of electric passenger cars in the world. The country is also playing a key supplier role as EVs continue to use lithium-ion batteries which encompasses lithium-ion cells that use metals like lithium, nickel, cobalt and manganese. And with the purchase of mines in countries like Bolivia, Chile, Australia and Congo, China is solidifying its position as a key supplier of these metals.

Continuous Production of EVs

Electric vehicles are potentially cheaper to run and maintain than conventional cars. And that is the reason making them an easier sell for consumers, and in turn, increasing the demand for more EVs in a broader range of models. Looking at McKinsey forecasts, the growth of EVs and hybrid electric vehicles will garner 30 percent of all vehicle sales by 2025. It also predicts that plug-in electric vehicles (PEVs) will reach nearly 8.4 million units, with a 7.7 percent market share by 2025 as just less than 1 million vehicles or 1 percent of global auto sales came from these vehicles in 2016.

Moreover, in North America and Europe, hybrid vehicles and BEVs are set to lead over the next decade as plug-in hybrids are not gaining much popularity in both regions. In Europe, plug-in electric vehicles (BEVs and PHEVs) will reach from around a 2 percent share of total new sales in 2017 to nearly 9 percent by 2025.