COVID-19 causes dip in electric vehicle sales, but long-term outlook intact: Report

The novel coronavirus disease (COVID-19) pandemic will break 10 years of growth in the electric vehicles (EV) market, after a negative impact on sales for this year, according to a BloombergNEF (BNEF) report on May 19, 2020. The long-term growth of the market, however, will not be affected, the report said.

Only 1.9 million EVs will be sold this year, 18 per cent lower than sales in 2019, according to the report.

The COVID-19 pandemic is set to cause a major downturn in global auto sales this year, said Colin McKerracher, head of advanced transport for BNEF.

“It (the pandemic) is raising difficult questions about automakers’ priorities and their ability to fund the transition,” he said. “The long-term trajectory has not changed, but the market will be bumpy for the next three years,” he added.

The situation, however, is worse for cars with combustion-engines, as there will likely be a 23 per cent decline in sales for them, the report said. BNEF’s analysis suggested global sales of internal combustion engines (ICE) cars peaked in 2017, with a long-term decline set to continue after a temporary post-crisis recovery.

EV models will account for 58 per cent of global passenger car sales by 2040, the report pointed out.

By 2040, EVs will comprise of 31 per cent of all cars on the street, 67 per cent of all municipal buses, 47 per cent of all two-wheelers and 24 per cent of all light commercial vehicles. The oil demand will reduce by 17.6 million barrels per day by 2040.

About 78 per cent of this investment will be for home, workplace and private commercial charging, according to BNEF estimates.

Investments in public charging infrastructure for EVs will be a cumulative $111 billion across all countries by 2040. Most of this can be provided profitably by the private sector as utilisation rates rose in the past few years, but government support may be needed in some regions, according to the report.

By 2025, the price of EV ownership will be on par with conventional cars due to a fall in lithium battery prices.

The date, however, will vary greatly depending on the market. It may be as early as 2022 for large cars in Europe but 2030 or after for small ones in India and Japan.

The world will need around 290 million charging points by 2040 that will require an investment of $500 billion. EVs accounted for 3 per cent of global car sales in 2020, with a projected increase to 7 per cent in 2023. They will also add an additional 5.2 per cent to the global electricity demand, the report said.