How will COVID affect the electric vehicle market?
As part of the global initiative to combat climate change, the sale of non-electric vehicles will be banned in 9 countries by 2030. In the UK, where the date is currently 2035, there has been talk of bringing this forward to 2030. Some countries have plans for earlier bans – such as Norway, which plans to phase them out by 2025, and Austria, who planned to stop the sale of them this year. These initiatives and benchmarks have proven to be the impetus behind legislation, innovation and movement in the electric vehicle market over the last couple of years.
Obviously, recent events have many in the industry questioning where the market could – and will – go next. None of us could predict the events of 2020 and cannot begin to predict where we will be this time next year or into the future, so there is uncertainty around many markets and how this global crisis will impact them.
Currently, there are a number of factors which are affecting and will continue to affect the global electric vehicle (EV) market. Let’s take a look at where things stand and how they might progress in the mid to long term.
Market innovation and investment
A threat to the EV market is a threat the global automotive market in itself. Ostensibly, not all manufacturers are dedicated to EVs, although all major car manufacturers now have an electric model, but with EVs having a relatively small share of the market, many currently rely on the sale of non-electric vehicles to bolster their investment and fund their innovation into making EVs sustainable and affordable for the mass market.
Understandably, the global vehicle market has dropped in 2020. It’s thought that by the end of the year, there will be a drop in global sales of around 15%. That being said, this has led to EVs taking a larger share of the market. Currently, EVs have around a 3.2% share of the global vehicle market, compared to 2.5% last year. In addition, registrations for pure-EVs in the first of seven months of 2020 are up 112% compared to 2019. The number of TESLA vehicle deliveries dropped in Q1 of this year, but increased slightly in Q2.
Positively, the number EV-related patents filed is projected to increase by 13% in 2020 compared to 2018, showing continued and increased interest and investment in innovating in this space. It’s projected that 100 new electric car models will be made available in 2020.
Another factor that will greatly affect the EV market in the wake of COVID is the buying behaviour of consumers. Regardless of any government-imposed lockdowns or other social distancing measures, the general population will understandably be apprehensive about continuing behaviours or activities going into the near future that they might not have questioned before. One of these being public transport.
Although it is now – in the UK anyway – possible to use public transport with a face covering, there are the obvious restrictions on numbers, and people will also be generally more keen to use transport methods that reduce their risk of infection. This could very well lead to an increase in the use of private vehicles – and with EVs typically costing around 80% less to run than their petrol counterparts, we may continue to see EVs gain a large share of the market.
Legislation and regulation
Aside from the effects that possible further lockdowns or social distancing measures could have on the global auto and EV market, how governments approach legislation and regulations specifically around EVs in the wake of COVID-19 could also massively impact the market’s growth or otherwise. Some countries may choose to relax fuel efficiency standards and EV mandates in order to bolster the struggling traditional automotive industry. Others may see the move towards increased personal vehicles use as an opportunity to accelerate the initiative, investing in charging infrastructures and maintaining or increasing incentives to produce and use EVs.
Elmelin are here to support the automotive industry on the journey to making electric vehicles a sustainable option for the mass market. Our mica-based insulation solutions help to improve safety and efficiency – and as a Europe-based manufacturer, we are well placed to slot into your supply chain. If you’d like to find out more, get in touch.