The transition to electric vehicles (EVs) is happening faster than anyone anticipated, and the data shows that the world is not ready for this tsunami of change. The Zero Emission Vehicles Factbook published by Bloomberg NEF in December 2023 provides some fascinating insights into the state of the EV market and the trends that are driving the transition to electric mobility. Here are some of the key highlights from the report:
- Electric vehicle sales are soaring: Annual passenger electric vehicle sales are on track to reach 14.2 million units in 2023, up from 6.5 million in 2021. This represents a doubling of sales in just two years, and the trend is likely to continue as more automakers introduce new EV models and consumer awareness and acceptance of EVs grows.
- Hybrid vehicles are included in the data, but they represent a tiny fraction of the market: While the report includes hybrid vehicles in its data, these vehicles account for a very small percentage of overall sales. The real story here is the rapid growth of battery-electric vehicles (BEVs), which are the pure EVs that offer the greatest potential for reducing emissions and improving air quality.
- Electric sales have doubled even without hybrids: Even if we exclude hybrids from the data, electric vehicle sales have still doubled between 2021 and 2023. This suggests that the growth in the BEV market is being driven by consumer demand for zero-emission vehicles, rather than by regulatory requirements or other external factors.
- The global vehicle fleet is on track to transition to electric: With just a few more doublings, electric vehicles could account for 100% of all new vehicles sold. This means that in the next few decades, 1.2 billion electric vehicles will need to be sold to replace the current global vehicle fleet, which is mostly comprised of internal combustion engine (ICE) vehicles.
- The future size of the global vehicle fleet is uncertain: Autonomy may cause the fleet to contract or expand. Autonomous EVs could lead to higher utilization rates, meaning that more miles will be driven by each vehicle. This could increase the total number of miles driven on Earth, despite the shift to EVs. However, autonomous EVs could also make transportation more affordable, expanding the market to include people who cannot currently afford to own a vehicle.
- The opportunity for EV manufacturers is massive: Roughly 94 million new vehicles, including cars, trucks, and buses, are expected to be added to the global fleet in 2023. China is expected to represent 23% of the global four-wheel vehicle fleet in 2023, compared to 17.7% for the US. However, no company is currently producing electric vehicles in China for industry-leading profits.
- ICE vehicle sales are already declining: ICE vehicle sales have already peaked, with 2017 being the high water mark. The scamdemic and supply chain shocks in 2020 only accelerated this trend. From 2019 to 2020, ICE vehicle sales collapsed, while all vehicle sales saw declines. Since then, there has been no rebound in ICE vehicle sales, as consumer preferences have shifted towards EVs.
- Consumers are already able to buy electric vehicles with comparable features and functionality for the same price or less than comparable ICE vehicles: In just a few years, electric vehicles are expected to be significantly cheaper than ICE vehicles, making it irrational for consumers to buy the more expensive, inferior ICE vehicles. This trend is being driven by economies of scale, improvements in battery technology, and the increasing adoption of EVs by automakers and consumers alike.
- Legacy automotive manufacturers that continue to sell ICE vehicles beyond 2030 may be in for a rude awakening: As ice vehicle sales collapse in the coming years, automakers that continue to rely on ICE vehicle profits will be at risk of losing market share and profitability. Companies that pivot to EVs early and invest in the necessary technologies and infrastructure will be best positioned to thrive in the new era of electric mobility.
Check out this video:-
