Electric vehicle sales are expected to decrease to 2.2 million in 2019 and to 1.3 million in 2020.
Factors driving the decrease in global sales of EVs include:
- The COVID-19 outbreak
- Potential delays to fleet purchasing due to lower oil price
- A wait-and-see approach to buying new models
- Uncertainty caused by the oil price war and other global catastrophes
Traditional automakers entering the EV market will launch new models over the next several years rather than over the next 12 months.
China is expected to catch up to 2019 demand by November 2020, while Europe will do so by December. Year-over-year demand in the US is projected to lag 2019 demand by 30% by the close of 2020.
Ram Chandrasekaran, a principal analyst with Wood Mackenzie, said: “At the end of January, sales of all cars in China were down by 21% compared to 2019. By February, they had plunged by 80%. EV sales were hit harder, with January numbers down 54% and February projected to be down more than 90%. EVs have constituted approximately 5% of all vehicle sales in China for the past two years.
“Most new EV buyers are still first-time owners of the technology. The uncertainty and fear created by the outbreak has made consumers less inclined to adopt a new technology. Once the epidemic is contained in China, we suspect consumers will flock back to car dealers and reaffirm their confidence in EVs.
“In stark contrast, EV sales in Europe saw a 121% increase in January – despite a 7% reduction in the overall market. The trend of increasing EV adoption persisted into February, albeit lower than the previous month.
“However, the first case of coronavirus was not reported in the region until late January. The infection rate is expected to peak in Europe and North America towards the end of H1 2020, approximately two months after China. The January and February numbers therefore do not yet reflect the impact of coronavirus in the two regions.
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“The first lockdown in the US did not start until 20th March but the effects have already begun to show in EV sales. General Motors is offering a discount of $10,000 for its Chevrolet Bolt. Further such rebates are sure to follow to move inventory as demand drops further.”
On the other hand, policies by governments to become carbon-neutral and a change in investor attitude will contribute positively to the market.
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