- China will lead the global growth in the electric car market in 2021. Electric car sales in China have almost tripled to 3.4 million.
- In Europe, electric car sales will increase by almost 70% in 2021, to 2.3 million.
- The United States made an impressive return to the electric car market in 2021.
Electric vehicles have developed very rapidly over the past three years. Despite the obstacles due to the global pandemic shrinking the conventional car market. In addition, when manufacturers begin to grapple with supply chain bottlenecks, it is not an obstacle for electric vehicles to continue to develop.
In 2019, electric cars have sold 2.2 million, which is equivalent to 2.5% of global car sales. In 2020, sales of electric cars will increase to 3 million, or equivalent to 4.1% of total car sales. Electric vehicle sales will more than double to 6.6 million by 2021. And that equates to 9% of the global auto market and more than triples their market share from the previous two years. Electric cars make the global car sales growth rate increase in 2021.
Sales of electric cars will continue to increase until 2022. But going forward, the growth in electric car sales will require greater efforts to diversify battery manufacturing. In addition, mineral supply is also important to reduce the risk of congestion and rising prices.
China will lead the global growth in the electric car market in 2021. Electric car sales in China have almost tripled to 3.4 million. In other words, more electric cars will be sold in 2021 in China alone than worldwide in 2020. This is China’s fastest growing electric car market since 2015. The electric car market’s share of the overall market per month is soaring, from 7.2% in January to around 20% in December. The Chinese government is targeting electric cars to reach a 20% market share by 2025. The annual increase shows that China is on the right track to do so.
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Several factors support market dynamics. The government extended electric car subsidies for another two years after the pandemic broke out. Despite the planned reductions of 10% in 2021 and 30% in 2022, the government has continued to extend the subsidy. Sales growth in 2021 suggests China’s electric vehicle market may be maturing despite a reduction in subsidies. Another important factor is the expansion of the range of small car offerings.
The tiny Wuling Hongguang Mini EV did not qualify for the subsidy but was still one of the best-selling models in China last year. This Wuling electric car offers an affordable entry point into the market for new customers. Overall, China’s electric car market looks set to grow further in 2022. This is driven by the combined effect of consumer preference for new model offerings, remaining national subsidies, and continued preferential treatment for EVs at the local level.
In Europe, electric car sales will increase by almost 70% in 2021, to 2.3 million. About half of those electric cars are plug-in hybrids. While annual growth was slower than in 2020, when sales more than doubled. This happened against the backdrop of the European auto market as a whole, which has yet to recover from the pandemic. Total car sales in 2021 will be 25% lower than in 2019.
The surge in EV sales in Europe last year was driven in part by the new CO2 emission standards. Purchase subsidies for EVs were also increased and expanded in most major European markets. Monthly sales in 2021 were the highest this year and peaked in December. This came as European electric car sales surpassed diesel vehicles for the first time with a 21% market share.
In absolute terms, the largest electric car market in Europe in 2021 will be Germany. This is the case where more than one in three new cars sold in November and December are electric cars. Overall, electric cars account for 17% of total car sales in Germany.
There is a significant difference in electric car sales across markets in Europe in 2021. Norway, at 72%, Sweden, at 45%, and the Netherlands, at 30%, sit atop the global rankings. Germany has the highest market share among the major European markets, followed by the UK and France (both around 15%), Italy (8.8%) and Spain (6.5%).
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The United States made an impressive return to the electric car market in 2021. More than half a million electric cars were sold last year. The US auto market as a whole also recovered, but electric cars doubled their share to 4.5%. The US electric car market is still largely dominated by Tesla, which accounts for more than half of all electric units sold. Tesla’s market share remains down from 65% in 2020 as new electric models are offered by other automakers. The federal incentive program is not renewed, but consumers can still benefit from the hefty tax credits (except for Tesla and GM vehicles).
Despite impressive growth in key markets, electric car sales are not rising at the same pace globally. China, Europe, and the United States account for about two-thirds of the overall car market but about 90% of electric car sales. In most other markets, electric cars account for less than 2% of overall sales. And in large developing countries such as Brazil, India, and Indonesia, the share is still below 1% without a significant increase over the past year. Meanwhile, sales of electric motors are growing in these countries.
The price premium attached to electric cars and the lack of charging infrastructure are the main reasons for the slow uptake. In Japan, sales of electric cars have also barely increased, with their market share remaining below 1% for the past three years. Korea and Australia show the greatest dynamics among the smaller markets. In Korea, electric car sales more than doubled in 2021 after two years without growth, increasing their market share to 8%. Electric car sales in Australia also more than tripled in 2021, albeit from a low start, bringing their market share above 2%.
Editor: Riana Nurhasanah
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