|The Rise of Electric Cars
Electric cars are well and truly on the
rise, with sales up, stocks pumping, and industry giants ready to take over. Despite slow uptake in Australia and New Zealand, the world is already making a clear transition away from the internal combustion engine. While the cost of the average electric car is still higher than the cost of the average petrol car, the gap is getting smaller every day. As technology develops and production capabilities improve, market dominance is pretty much guaranteed.
The global sales of electric vehicles rose
from practically zero at the turn of the century to almost 3.5 million in 2020.
Almost half of all sales took place in China, followed by Germany, the US, and
the UK. These numbers are likely to skyrocket in future years, as costs come
down, incentives add up, and people develop more trust in electric vehicle
According to some commentators, the
electric vehicle industry is where the internet was in the late 1990s and early
2000s - with key infrastructure already in place and big players ready for
world domination. According to the latest forecast by investment bank UBS, 20%
of all new cars sold globally will be electric by 2025. This is a very
significant number, and it's just a few years away. This figure will keep
rising at an even faster rate, leaping to 40% of all new car sales by 2030, and
almost 100% by 2040.
Over the past year, electric vehicle sales
have risen at a faster rate than ever before. There has been significant growth
in China, the US, and Europe, which represent the three biggest markets in the
world. Sales increased by 160% in the first half of 2021 compared to the year
before, with 2.6 million vehicles sold in these three markets alone. This
represents 26% of new sales, with smaller markets likely to join the party over
the next decade. Some countries are planning to ban petrol cars by 2035, and at
the recent COP26 climate summit, 20 nations agreed to outlaw petrol vehicles
China is leading the electric revolution,
with 1.1 million vehicles sold in the first half of 2021, or 12% of all sales.
This is smaller than the US at 250,000 and 3% of sales, and much smaller than
Australia and New Zealand which are well below 1%. However, local sales
represent a tiny proportion of the global market, which is marching upwards at
a sharp rate. According to a report from IDTechEx, the sale of electric
passenger cars alone will surpass five million units this year: "If they
do, it will mean an astonishing growth rate of ~86% CAGR since 2011."
Up until now, however, market penetration
has been mostly confined to China, North America, and Europe. Sales in the Asia
Pacific, South America, and Africa are almost non-existent, and there are few
government incentives available to move the market along. While incentives and
infrastructure programs are available in leading markets to support electric
vehicle uptake, the rest of the world is waiting to see what happens as
production numbers rise and the market adjusts to the new world.