Is the Electric Vehicle Revolution Losing Steam?

"Global Electric Vehicle Market Trends Revealed: Varied Progress Across Regions and Segments, Automakers Facing Delays - Bloomberg EV Outlook Report"

The global electric vehicle (EV) market in 2024 is experiencing varied progress across different regions and segments, as per the Bloomberg EV Outlook Report. While overall EV sales are on the rise, certain markets are witnessing a slowdown, with many automakers postponing their EV targets. It is essential for industry enthusiasts to be aware of the key takeaways from the report.

Which Regions Are Charging Ahead in EV Sales? The growth of EV sales is decelerating at different rates worldwide. China, India, and France are maintaining robust growth, while Germany, Italy, and the US are encountering challenges. Japan’s market is hindered by a lack of commitment from major carmakers towards EVs and the absence of new mini-car models.

Despite the slowdown, global growth in 2024 is in line with BNEF’s forecasts. Some automakers have scaled back their electrification goals due to high production costs, while others like Kia and Volvo are showcasing strong performances. Kia is targeting 1.6 million EV sales by 2030 and is set to introduce an affordable EV3 SUV, whereas Volvo witnessed a remarkable 53% surge in EV sales in April 2024, driven by the EX30 model.

BNEF predicts that global passenger EV sales will continue to grow, albeit at a slower pace, increasing from 13.9 million in 2023 to over 30 million by 2027. The annual growth rate is expected to average 21%, down from the 61% seen between 2020 and 2023. By 2027, EVs are projected to represent 33% of new global passenger vehicle sales, with China and Europe leading at 60% and 41%, respectively. The Nordics are forecasted to reach 90%, while Germany, the UK, and France are expected to exceed 40%. The US is anticipated to see 29% of EV sales, with Japan lagging behind but emerging economies like Brazil and India poised for rapid growth.

The global EV fleet is set to expand to over 132 million by 2027, up from 41 million in 2023. Despite short-term challenges, the long-term market outlook for electric vehicles remains positive. Economic advancements are anticipated to fuel continued growth, with EVs projected to account for 45% of global passenger vehicle sales by 2030 and 73% by 2040. However, Southeast Asia, India, and Brazil are expected to lag behind the global average and will require enhanced regulatory support.

When it comes to decarbonizing commercial vehicles, including vans, trucks, and buses, electrification is gaining momentum. Electric light-duty delivery vans and trucks are rapidly gaining market share in China, South Korea, and parts of Europe, while the US is lagging behind. The global e-van market is projected to approach one-third of sales by 2030, reaching two-thirds by 2040. Electric heavy trucks are expected to become economically viable for most applications by 2030, initially in urban areas before expanding to long-haul routes. On the other hand, the future of fuel cell trucks remains less certain, although they may remain viable for certain applications.

New environmental policies in Europe and the US are expected to drive the adoption of electric and fuel-cell trucks. EU CO2 targets indicate high electrification rates by 2030, with municipal buses rapidly transitioning to electric, projected to exceed 60% of sales by 2030 and 83% by 2040. Despite these advancements, global road transport is not yet on a net-zero trajectory, and protectionist policies could impede progress. To achieve zero emissions by 2050, combustion vehicle sales must cease around 2038, with leading markets phasing out even earlier, according to BNEF analysis.

The Nordic countries are the only ones forecasted to fully phase out combustion vehicles before 2038 in the Economic Transition Scenario (ETS). Governments must strike a balance between industrial strategies and maintaining competition and affordability in the EV market. Stronger regulatory pushes are essential to bridge the gap between the Economic Transition Scenario and the Net Zero Scenario, necessitating significant spending for both scenarios.

The value of EV sales across all segments is projected to reach $9 trillion by 2030 and $63 trillion by 2050 in the Economic Transition Scenario. In the Net Zero Scenario, this value is expected to exceed $98 trillion by 2050. Governments are actively competing to develop local supply chains, with EVs and batteries remaining central to industrial policies for decades.

Lithium-iron-phosphate (LFP) batteries are reshaping the EV market, reducing the reliance on metals like nickel and manganese. Competitive pricing is driving advancements in LFP technology, including rapid charging, cold temperature performance, and higher energy densities. LFP is anticipated to capture over 50% of the global passenger EV market within two years, particularly in China where many LFP cell manufacturers are situated. This shift is resulting in lower-than-expected consumption of nickel and manganese by 2025.

Plug-in hybrids (PHEVs) are experiencing a resurgence, primarily driven by China, which became the largest PHEV market in 2022. The average electric range of PHEVs reached 80 km in 2023, with some models in China surpassing 100 km. Chinese PHEV battery packs are nearly double the size of those in the US and Europe, often tailored to meet fuel economy regulations. While PHEVs are considered a bridge to a zero-emission future, questions linger about their effectiveness, as they could potentially increase oil demand if they replace battery electric vehicles (BEVs) and are not fully utilized in electric mode.

A fully electric global vehicle fleet could consume twice the electricity that the US did in 2023, according to the BNEF market outlook. By 2050, in the Net Zero Scenario, an all-electric vehicle fleet will necessitate approximately 8,313 TWh of electricity, double the US’s consumption in 2023. Despite the increase, EVs can facilitate energy system electrification through smart charging and flexible pricing. The EV charging industry must rapidly evolve, requiring an estimated $1.6 to $2.5 trillion in infrastructure, installation, and maintenance investments by 2050.

The adoption of EVs and the electrification of commercial vehicles are on the upsurge, driven by new policies and technological advancements in battery technology. However, substantial investments in infrastructure and regulatory support are imperative to sustain this momentum and achieve long-term success.

Matt Lyons

Matt Lyons

Matt Lyons is the founder of Forestry & Carbon. Matt has over 25 years as a forestry consultant and is invoilved in numerous carbon credit offset projects.

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