Sales of electric vehicles have doubled in barely a year, China and Europe are driving the market

Global market shares, dynamics, prospects, these are all rather (very) positive factors concerning the electric vehicles (EV)
in 2021.

The comparison grid is all the more impressive over the space of the last decade. There were 130,000 electric vehicles sold over the whole of 2012, which corresponds to the sales of a single weekend in 2022.

Electric vehicles represent 9% market share in 2021, Europe in good shape

EVs are popular in many automotive markets, and the figures released by the International Energy Agency (IEA) reflect this dynamic. Indeed, from 2.5 million in 2019 to 6.6 million electric vehicles sold in 2021, the increase is substantial, rising from 2.5% to 9% of market share worldwide in just three years.

However, the IEA notes a 25% drop in the number of new vehicles sold in 2021 compared to 2019 in Europe, in a context where the second-hand or leasing market is in full swing. In total, 16 million EVs would be in circulation in the world according to the IEA, and they would consume (already!), annually, as much electricity as a country such as Ireland, with 30 TWh.

And Europe, precisely, is not for nothing, since the Old Continent is experiencing a 70% increase in sales of electric vehicles between 2020 and 2021, for a total of 2.3 million units sold. The share of plug-in hybrids, however decried, is also remarkable, since it represents one in two models among the EVs sold last year. Nevertheless, the growth is not homogeneous, since if electric vehicles represent 72% of market share in Norway in 2021, they obtain “only” 15% in France.

China, a particularly juicy market

Particularly flourishing in 2021, the Chinese market had 3.4 million electric vehicles sold last year, which is more than all the sales made in the world in 2020. The increase is indeed impressive just over the year 2021 since the electric vehicle goes from 7.2% of market share to nearly 20% between January and December of the past year. And, according to the IEA, Beijing wants the market share of electric vehicles to reach 20% monthly from 2025.

The rebound in electrics in the United States, with 4.5% market share in 2021, is also substantial, driven, according to the IEA, by tax credits for the purchase of EVs other than Tesla and General Motors, and a diversification of manufacturers in the market. Also among the growing markets, South Korea is doing well, with 8% market share for EVs in 2021.

On the other hand, many countries are seeing their progress stagnate at best. This is particularly the case in emerging markets such as Brazil, India and Indonesia, where electric vehicles do not exceed 2% market share. Japan, where some domestic manufacturers like Toyota approach the electric transition with restraint, does not even obtain 1% market share for EVs.

Sustainable market growth in the medium term?

Three pitfalls may, however, jeopardize the acceleration of electric vehicle sales worldwide. The first, which has a negative impact on many technology-related sectors, concerns the persistent global shortage of semiconductors. However, electric cars greatly need it, up to twice as much as for a thermal vehicle, and if manufacturers are trying somehow to support current demand, the challenge of a “return to normal” on the semiconductor market is still higher.

The second potential obstacle is linked to the increase in demand for materials and minerals which, in addition to causing an increase in prices, generates a risk of rapid shortage for some of them – by 2025 for lithium and cobalt. . Thus, according to the IEA, the prices of steel, aluminum and copper have increased by up to 100%, 70% and 33% respectively in 2021, while the prices of lithium carbonate, nickel and graphite rose by 150% (!), 25% and 15% in one year.

The repercussions, in particular on the price of batteries for electric vehicles using these materials, are still limited according to the IEA. This observation is due in particular to the use of other materials, to technological developments favoring a gradual reduction in the cost of manufacture, and to the time required for the value chain to be more strongly impacted by the rise in the price of raw materials.

Finally, a final obstacle could involve the public aid currently offered by various governments, the current level of which will not be maintained forever. Thus, in China alone, the amount of this public aid should decline by 40% at the end of 2022 compared to the beginning of 2021. However, if the Chinese government has extended this aid for two years in a row due to the Covid-19 pandemic, nothing says that new subsidies will be offered by Beijing in the years to come. The massive sales of the Wuling Hongguang Mini EV, an EV that is not eligible for a subsidy, however, seem to prove the maturation of the Chinese market. Who will soon be followed everywhere else in the world?

Source: Report of the International Energy Agency (IEA)