World EV market reached key ‘tipping point’ in 2020
The switchover to electric cars can’t come soon enough – the latest data suggests 2020 certainty didn’t disappoint in that regard.
The surge in EV uptake worldwide in 2020 is all the more impressive, considering the state of the global economy. One of the deepest global downturns of all time, and yet demand for electric vehicles remained healthy, and grew to such an extent that EV sales in Europe managed to outpace those in China for the first time.
By December 2020, year-on-year EV sales volumes leapt 42 per cent. EV Volumes, a Swedish-based consultancy, kept track of the EV market’s lucrative year in 2020, recording a grand total of 3.2 million EV sales for the year as a whole.
Europe leads the way
To get an accurate reading for the health of EVs worldwide, it’s a good indication to follow developments in the European market. The continent is one of the world’s richest markets, despite not being one of the highest populated. A peppering of densely-populated countries makes it important for people in this corner of the world to get around. If there’s a way of driving that’s cleaner for the environment, Europeans have pockets big enough to buy.
China is making waves in the EV space, and we’ve written previously about Chinese EV manufacturer Nio’s lofty ambitions to break into the European market by the mid-2020s. The story of EVs reflects the balances of power within the EV market and the global economy as a whole – Europe is a wealthy market oriented towards consumer spending, with hefty demand for EVs.
China, on the other hand, has the manufacturing capacity and increasing technological know-how to quench the European thirst for the latest EVs money can buy.
One step closer to EV dominance
Despite the sharp uptake of EVs in 2020, their market share as a percentage of total car sales worldwide remains low, at least for the time being. In order to get anywhere near a majority of car sale volumes, significant growth in EVs is necessary for a prolonged period.
That’s because the IEA estimated that EVs accounted for just 2.6 per cent of total car sales in 2019. Despite this, EVs are becoming cheaper to buy over time, and a report by the Guardian suggested that sometime between 2023-25, EVs could become less expensive than petrol or diesel counterparts, thanks to declining battery prices.
Helping this along is a raft of generous government subsidies, intended to make EVs more affordable now, in order to boost demand in the longer term. Here in the UK, a pure-electric car currently has a sales subsidy payable up to £3,000 for cars worth less than £50,000, while US buyers can take advantage of generous tax bonuses. The idea behind these subsidies is that demand should grow to such an extent that EVs can become affordable without government assistance, making them the most attractive choice.