Global EV Market: Already on the Road to Recovery?
The combination of a pandemic, supply-chain disruptions, economywide lockdowns and a worldwide recession is bad news for virtually every industry, and the electric vehicle sector is no exception. Add a historic decline in oil prices making fossil fuels cheaper at the pump, and 2020 is shaping up to be an especially rough year for the plug-in car market.
Global passenger EV sales declined sharply in response to the COVID-19 pandemic. China, the world’s largest auto market, saw EV sales plunge by 60 percent in February compared to the same month last year. The precipitous drop came on top of softening consumer demand for plug-in cars prior to the pandemic, as the government started to phase out subsidies .
In the U.S., EV sales in April fell by more than 50 percent compared to the same month a year earlier. This follows a down year for EV sales in America in 2019. Congress failed to extend federal tax credits for EVs last year, removing a key incentive for top electric car manufacturers going forward. The Trump administration also rolled back national fuel economy standards during the pandemic, making the regulations easier for companies to meet without selling EVs.
As economies open up and global automakers get back to business, it’s an open question as to how companies and governments will prioritize spending on new EV products and technologies, as well as sales incentives, public awareness campaigns, charging infrastructure and other steps to help make EVs go mainstream. But while plug-in vehicles are expected to be on a bumpy road for the next few years amid the fallout from the coronavirus pandemic, industry experts say they already see light at the end of the tunnel.
Several major auto companies, including Volvo , Volkswagen and General Motors have underscored their committment to vehicle electrification in recent weeks. Ken Morris, GM’s vice president of electric and autonomous vehicles, said on a press call last month that product development work on the company's future EV portfolio "is progressing at a rapid pace" despite the pandemic.
“I think we’re going to find a reluctance on the part of some consumers in the very short term. And I’m talking short term — six months, maybe a year,” Michigan Rep. Debbie Dingell (D-Dearborn) said on the Political Climate podcast distributed by GTM. “Then we need to ensure that the autos have the resources that they need [to bounce back].”
The EV market: How bad will it get, and how fast will it recover?
Bloomberg New Energy Finance anticipates global EV sales will fall by 18 percent in 2020 — to 1.7 million sales worldwide — as the overall automotive market contracts. Longer-term, however, BNEF believes EV adoption will continue to accelerate, with electric models accounting for nearly 60 percent of all new passenger car sales worldwide by 2040, representing 31 percent of the entire car fleet in that year.