CRUISING AHEAD: GLOBAL EV FLEET SET TO SWELL
In the next few years, the electric vehicles movement is set to see remarkable progress with increased adoption, but the journey is going to be a challenging one
The world is about to pass another important milestone in electric vehicle adoption: 20 million plug-in vehicles on the road globally, come June, according to BNEF estimates. That’s remarkable growth from only 1 million EVs in 2016. In the second half of 2022, almost a million EVs a month will be added to the global fleet. That’s about one every three seconds. Vehicles are eventually retired from the fleet due to age, wear-and-tear, crashes and battery degradation. But that’s not a big part of the EV story so far, mostly because the majority of EVs in the global fleet were sold in the past 18 months. By the end of 2022, BNEF is expecting over 26 million plug-in vehicles on the road. The speed of growth is faster than what many incumbents in the automotive and oil industries were expecting just a few years ago.
Taking a look at the geographic breakdown of the vehicles underscores how just a few regions are driving most of the adoption. China accounts for 46% of the total sales to date, followed by Europe at 34%. North America is a distant third at 15%, but fresh policy support should get the EV market moving this year and next. All the remaining countries combined account for just 5% of the global EV fleet.
Most of the world’s plug-in vehicles are fully electric, but there are also 5.3 million plug-in hybrids. Europe accounts for most of them. The plug-in hybrids have helped automakers meet Europe’s increasingly stringent targets for reducing carbon emissions from vehicles. Attention will eventually shift to the big emerging auto markets in the world, like India, Brazil, Mexico and Southeast Asia. EV adoption has barely started in these countries and regions, yet they are key for the growth in global EV adoption to continue once the larger markets start to saturate. There are several encouraging signs. In India’s three-wheeler market, over 50% of sales are already electric. South-east Asia markets like Vietnam already have relatively high adoption of electric two-wheelers. And parts of Latin America are leading the way on electric buses and are starting to focus on electrifying taxis.
Perhaps most importantly, the models available in China’s EV market show how electric mobility can be very compelling for lower-middle class consumers in emerging markets. The best-selling EV in China so far this year is the Hongguang Mini, which retails for just $4,700. Models like that, combined with a big push on electric kei cars from Japanese automakers, and more electric motorcycles and scooters, will help the rest of the world make the jump to electric mobility.
The next few years will bring remarkable progress on EV adoption, but it’s worth keeping in mind just what a huge task it is to convert the world’s vehicle fleet. BNEF estimates that there are 1.2 billion light-duty passenger vehicles on the road globally. At the end of 2022, just over 2% of them will be electric. There’s still a long way to go. But the momentum is building.
CHINA FOR ACCOUNTS TOTAL 46% OF THE BY FOLLOWED SALES, 34%. NORTH EUROPE AT A DISTANT AMERICA IS 15%, BUT FRESH THIRD AT SHOULD POLICY SUPPORT MARKET GET THE EV THE MOVING SOON. COUNTRIES REMAINING FOR 5% OF ACCOUNT THE EV FLEET