The Rise of Electric Cars
Electric cars are well and truly on the rise, with sales up, stocks pumping, and industry giants ready to take over. Despite slow uptake in Australia and New Zealand, the world is already making a clear transition away from the internal combustion engine. While the cost of the average electric car is still higher than the cost of the average petrol car, the gap is getting smaller every day. As technology develops and production capabilities improve, market dominance is pretty much guaranteed.
The global sales of electric vehicles rose from practically zero at the turn of the century to almost 3.5 million in 2020. Almost half of all sales took place in China, followed by Germany, the US, and the UK. These numbers are likely to skyrocket in future years, as costs come down, incentives add up, and people develop more trust in electric vehicle technology.
According to some commentators, the electric vehicle industry is where the internet was in the late 1990s and early 2000s - with key infrastructure already in place and big players ready for world domination. According to the latest forecast by investment bank UBS, 20% of all new cars sold globally will be electric by 2025. This is a very significant number, and it's just a few years away. This figure will keep rising at an even faster rate, leaping to 40% of all new car sales by 2030, and almost 100% by 2040.
Over the past year, electric vehicle sales have risen at a faster rate than ever before. There has been significant growth in China, the US, and Europe, which represent the three biggest markets in the world. Sales increased by 160% in the first half of 2021 compared to the year before, with 2.6 million vehicles sold in these three markets alone. This represents 26% of new sales, with smaller markets likely to join the party over the next decade. Some countries are planning to ban petrol cars by 2035, and at the recent COP26 climate summit, 20 nations agreed to outlaw petrol vehicles even earlier.
China is leading the electric revolution, with 1.1 million vehicles sold in the first half of 2021, or 12% of all sales. This is smaller than the US at 250,000 and 3% of sales, and much smaller than Australia and New Zealand which are well below 1%. However, local sales represent a tiny proportion of the global market, which is marching upwards at a sharp rate. According to a report from IDTechEx, the sale of electric passenger cars alone will surpass five million units this year: "If they do, it will mean an astonishing growth rate of ~86% CAGR since 2011."
Up until now, however, market penetration has been mostly confined to China, North America, and Europe. Sales in the Asia Pacific, South America, and Africa are almost non-existent, and there are few government incentives available to move the market along. While incentives and infrastructure programs are available in leading markets to support electric vehicle uptake, the rest of the world is waiting to see what happens as production numbers rise and the market adjusts to the new world.