The verdict is in, and electric cars are here to stay. Sales revenue for electric vehicles has continued to grow exponentially throughout 2020. In the US alone, EV sales rose 81% from the previous year, selling 361,000 cars. Globally, manufacturers sold more than 2 million vehicles, and China accounted for almost ½ of these sales.
The International Energy Agency (IEA) predicts these trends will indicate that the industry’s fortunes will continue to grow steadily. The three main forces influencing this growth are:
- New EV-focused business investments,
- Policies aimed at reducing greenhouse gases, and
- Declining costs for essential battery packs.
The future looks bright for electric cars, but what is the industry’s forecast leading up to 2030?
Projecting the Global EV Outlook by 2030
Analyses from recent global developments in the electric mobility industry drive the outlook for 2030. The data uses historical information to forecast the industry’s future. According to the IEA analysis, the amount of EVs in operation (VIO) featured over 5 million units in 2019. Experts expect this to grow significantly by 2030.
Two Scenarios for Growth
The IEA considered two future scenarios extending to 2030:
- One scenario is called the New Policies Scenario. The policy uses current and projected policies for the next few years to forecast EV sales of a maximum of 23 million and EV VIO of a maximum of 130 million.
- The second scenario is the EV30@30 Scenario, which assumes that individual countries will attain their pledge and achieve a 30% market share by 2030. It projects that by that time, the EV VIO will reach 250 million units. This is close to double the New Policies Scenario projected figure. Under the EV 30@30 Scenario, the IEA further projects that oil demands will drop by 4.3 million barrels per day. This represents about 4% of the current 100 MMBD oil demand.
Norway & China Pioneer Market Dynamics
The 2019 IEA Global EV forecast included its updated projections for several electric vehicle scenarios. The country breakouts have China leading in policy stimulus and the number of electric vehicles in operation.
Additionally, Norway holds almost 50% of the EV market share due to hitting their target setting and significant policy incentives for EV drivers.
The IEA report and forecast illustrates the opportunities and challenges that lay ahead before achieving a transformation with EV’s prospects for cleaner energy. Countries will need policies, incentives, and availability of EVs before they can claim any of the EV market shares.
Climate Policies will Promote EV Growth from 2020 to 2030
Analysts confidently predict that greenhouse and climate change, along with social costs, will undoubtedly impact EV growth beyond 2020. Such factors have already prompted certain countries to introduce policies that give citizens the incentive to transition to the EV sector.
As mentioned, China and Norway have demonstrated an unusual aggressiveness in using policy to promote electrified transportation. The two nations have generously provided citizens with tax credits, registration fee exemptions, cash rebates, and supply-side support. These incentives are just the beginning of what needs to be done to further transition markets to EVs.
Overall Electric Vehicle Forecast for 2020 to 2030
Within a decade, analysts predict cars going electric will cause one of the most significant market upheavals in the industry. Across the board, the seismic effects of this transition will produce both winners and losers. This is why no one should leave themselves out of such a significant shift.
Most industry actors and proactive automotive companies recognize this and are getting ready for the switch. They plan to take advantage of evolving autonomous driving technology, sky taxis, robot shuttles, and high-tech agricultural equipment as they vie for a part of the market growth.
China will Retain a Commanding International Market Share
Unsurprisingly, China has assumed a commanding lead in the EV market. More than just addressing local market demands, Chinese manufacturers are forging ahead internationally, gaining traction.
With the shift to EVs, there will be a need for thermal management, charging infrastructure, power electronics, and traction motors. Even though these other markets are undergoing a fast transformation, analysts expect that the electric passenger-car segment will have the largest impact within the 2020-2030 decade.
The new revolution, characterized by the rise of electric vehicles, is undoubtedly headed for exciting times in the next decade. Experts predict that by 2030 EV sales will surpass the conventional vehicle demand. Many EV companies’ future success largely depends on strategic industry decisions, accurate market reports, and industry forecasts.