The transition to electric vehicles (EV) is gaining shape throughout the world, notably in Europe, where the decision to ban fossil-powered cars and vans as of 2035 has set the continent on a trajectory to a largely electric automotive future. Bloomberg reported earlier this year that sales are breaking records again, but the pace of growth is slowing down. “We expect EV adoption to continue to rise in 2023, but at a slightly slower pace than the last two years, which saw sales jump from 3.2 million in 2020 to more than 10 million in 2022,” Bloomberg’s Colin McKerracher wrote. Its forecast foresees 13.6 million plug-in passenger vehicle sales in total for this year, with around 75% of those being fully electric.
1. Market dominance
Elon Musk’s Tesla remains the undisputed dominant seller of electric cars globally. Tesla sold 1.3 million units in 2022, driven by its Model Y SUV and the carmaker is predicting a 37% increase for 2023 to 1.8 million cars. As EVs are on average much more expensive than petrol or diesel cars, Tesla announced price cuts of up to 20% in Europe and the US in early January, quickly followed by a similar move from Ford.
Adding to the competition are traditional auto giants like Volkswagen and Stellantis group – which owns Peugeot and Jeep – which have also announced plans to launch their electric models. In 2021, Volvo announced all its vehicles will be electric by 2030. Luxury brands such as Rolls Royce and Ferrari are also planning to launch their first battery-powered models soon. Smaller and cheaper models, such as the Renault 5, are also due to hit the market in the next few years.
2. China
China is a leader in the electrification of cars, with policies encouraging the uptake of EVs. Such government incentives have doubled EV sales in 2022. Experts have warned sales could slow there in 2023 alongside shifts in the Chinese economy. On the other hand, Chinese media has reported the country’s domestic EV makers could soon see the nation displace Japan as the world’s top car exporter. China shipped 3.11 million units overseas in 2022, comprising 2.53 million cars and 580,000 commercial vehicles, an increase of 54.4% from 2021, according to the China Association of Automobile Manufacturers (CAAM).
Rising exports are a clear sign that Chinese carmakers’ development and manufacturing capabilities have largely improved following four decades of efforts.
Chen Jinzhu, CEO of consultancy Shanghai Mingliang Auto Service.
#China is leading a surge in electric vehicle sales https://t.co/3etvUp1jHk pic.twitter.com/85oFCvCj2v
— World Economic Forum (@wef) June 11, 2018
“Chinese companies like BYD and Geely will become strong contenders in the global automotive market.”
3. Infrastructure
To make the complete switch from fossil fuel cars to electric cars, EV owners must be able to charge their vehicles conveniently and quickly. Data shows that South Korea is a country that has 75.2 charging stations per 100 km, almost 3 times more than the second-ranked Netherlands (21.9). In order to ease this transition, the world needs an efficient EV charging infrastructure. In Belgium, all car parks in Brussels serving 10 cars or more must provide electric charging points by 2025 and the UK is planning to deploy smart EV charging stations by the same year. Still, while the number of available public EV charging stations is increasing, they are still scarcely spread out and take anything from 20 minutes to several hours depending on the terminal.
To accommodate a large number of incoming EVs and pave the way for the 2035 target in Europe, the development of a network of fast and accessible terminals for charging is crucial. The European Parliament voted last October for the faster roll-out of recharging stations asking for car-recharging stations every 60 km. According to McKinsey, the EU will need 3.4 million charging points by 2030 with updated power grids to cope. Launching an EV infrastructure is estimated to cost some €240 billion, with companies including Fastned and Ionity ramping up investment in a network of charging stations.
