The uncertainty is total as a result of the energy crisis, the Russian invasion or inflation, among other factors. This has a direct impact on the automobile industry, which is immersed in a delicate transition towards the electric car.
There are not a few drivers who have had to undertake the purchase of a new car in the last three years and have had Doubts about whether it’s time to go electricit is better to wait or perhaps an intermediate bet (hybrid, plug-in hybrid, renting) is the most sensible.
Be that as it may, the automotive industry is in a extremely delicate moment in which only the smartest manufacturers will survive and be competitive in the future.
Sales of plug-in vehicles will increase from 6.6 million in 2021 to 20.6 million in 2025
Not in vain, in the process of transition to electric mobilitythe automotive world has to face the microchip crisis, the scarcity of raw materials and the energy crisis, among many other things.
The combination is potentially explosive: billions of investment to adapt to the design and manufacture of electrified vehicles combined with considerable declines in sales and the need to maintain a wide offer for all types of customers, who are still not sure what the winning bet is.
The evolution of the automotive market
So how will the car market evolve in the next three years? Bloomberg NEF has published a report in which he analyzes the situation and forecasts the situation between now and 2025. And these are the conclusions.
More than 20 million plug-in vehicles in 2025
Sales of plug-in vehicles will increase from 6.6 million in 2021 to 20.6 million in 2025. This figure is higher than last year’s outlook, mainly due to a increased adoption in China.
One of the biggest concerns in the sector, the rising cost of batteries, will not prevent the adoption of electric vehicles in the short term. Bloomberg NEF is based on the fact that some of the factors that are driving the high costs of raw materials for batteries (war, inflation, trade frictions) they are also driving up the price of gasoline and diesel at record levels.
That’s sparking increased consumer interest in electric vehicles, and in addition, internal combustion engine vehicles are also becoming more expensive to produce.
By 2025, plug-in vehicles will account for 23% of sales of new passenger vehicles globally, up from just under 10% in 2021. Three-quarters will be full battery electric vehicles (BEVs).
Plug-in hybrids will not gain a significant share of the market outside of Europe and will reach their global peak around 2026. Sales of fuel cell vehicles will increase slightly due to a boost in China, but overall they will not have a significant impact on the passenger vehicle segment.
The share of electric vehicles in sales in some markets will be much higher, reaching 39% of sales in 2025 in China and Europe. Some of the major European car markets will go even faster, with Germany, the UK and France holding between 40% and 50% by 2025.
In fact, China and Europe will account for almost 80% of electric vehicle sales in 2025. The US market will start to recover from 2023, but will still account for only 15% of the global electric vehicle market in 2025.
Change of trend
The market is moving from being primarily driven by politics, to feed on consumer demand organic. As regulatory drivers begin to play less of a role, consumer adoption dynamics take over. Supply is already a greater constraint than demand in many countries.
The acceleration in the adoption of electric vehicles means that sales of combustion vehicles peaked globally in 2017 and now they are in permanent decline. By 2025, heat engine passenger sales will be 19% below their 2017 peak. Managing the decline while investing in the future is a significant challenge for some automakers.
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By mid-2022, there are already just under 20 million passenger electric vehicles on the road (including plug-in hybrids), which represents the 1.5% of the world fleet. It takes time for the change in new sales to flow through the fleet.
Sales of passenger electric vehicles are expected to continue to rise sharply in the coming years as political pressure continues to grow, more models hit the market and consumer interest takes off.
The global fleet of internal combustion engine passenger cars will continue to grow for another two years, but then will start to decline in 2024.
The transport of passengers and goods
The electrification of other segments is also accelerating and there are a growing number of case studies of successful countries in both rich and emerging economies. For example:
- China has 685,000 electric buses in circulation and 195 million electric two-wheelers.
- 17% of light commercial vehicle sales in South Korea were electric in 2021
- Nearly 40% of India’s three-wheeler fleet is already electric
Adoption is supported by more available models, corporate fleet commitments, favorable economics, and growing urban air quality concerns.
The medium and heavy truck market is also beginning to move, with close to 10,000 units sold in 2021. That will continue, as some of the world’s largest truckmakers target 35% to 60% of their annual sales to be zero-emissions, and mostly all-electric, by 2030.
The truck market is very varied. In urban duty cycles, battery electric trucks of any size will become the most economical option for various use cases during the current decade.
This is due to a combination of factors, including improving battery technologies, modest driving ranges and the relatively large efficiency penalty of diesel trucks in urban trafficwhich tends to consist of a recurrent and congested start-stop operation.
The megawatt-scale charging stationsas well as the emergence of higher energy density batteries in the late 2020s, will make battery electric trucks a viable option for heavy-duty, long-haul operations, especially for limited-volume use cases .
Fuel cell models in this segment will be introduced in greater numbers in the late 2020s, but more battery trucks are being launched and are poised to command a larger share of the market.
FCV adoption remains case and location specific, which requires substantial and technology-only policy support. Truck hydrogen supply, distribution and refueling infrastructure is also still far from reaching the scale needed for most fleet operators to make the switch.