Electric Vehicle Industry Assessment Covering Growth Factors and Upcoming Trends

Posted by Rahul Gautam on April 2nd, 2021

The global electric vehicle industry has grown massively over the last few years. The rapid expansion of the industry since the mid-2010s has been because of the shared vision among the industry players, the civil society, and policymakers. Moreover, the governments of many countries have enacted initiatives that have massively propelled the expansion of the global electric vehicle market. The total electric car fleet in the world surpassed 7.2 million units by December 2019.

This was a growth of over 40% from 2018. Furthermore, according to many reports, the total electric vehicle sales in the world in 2019 were 2.1 million units. However, with the outbreak of the COVID-19 pandemic, the sales of these vehicles are dropping significantly all over the world. According to surveys, there would be a fall of around 15% in the global electric vehicle industry in 2020 from 2019, with electric vehicle sales falling to 1.8 million units in 2020.

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As compared to the forecast done by P&S Intelligence, which is a market research company based in India, in the pre-COVID times, the electric vehicle industry would register a 43% fall in 2020. This would be because of the various uncertainties engulfing the global economy because of the pandemic. Moreover, preventive measures and initiatives such as countrywide lockdowns and restrictions on the movement of people and goods are causing a sharp decline in the worldwide sales of electric vehicles.

This is subsequently affecting the manufacturing rate of electric vehicles. As per industry experts, the gross value added (GVA) of the electric vehicle market could exhibit 14–16% reduction (vehicle manufacturing) in 2020. China, which is the biggest electric vehicle market in the world, is witnessing a sharp decline in the sales of electric vehicles. The fall in electric vehicle sales was the highest in February when electric car sales fell to 16,000 units.

This drop-off was nearly 60% from February 2019. Furthermore, the sales of electric vehicles picked up in the month of April and in May, were only down by 32% from May 2019. The electric vehicle industry in China will record an overall fall of as much as 14% in 2020. While the electric vehicle industry is witnessing a massive decline in several countries due to the pandemic, the long-term future of the industry will remain positive, as per industry experts.

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This is credited to several factors such as huge cost reductions in electric vehicle manufacturing and the growing popularity of these vehicles across the world. Moreover, due to the mushrooming scale of battery manufacturing and rapid improvements in battery technology, the demand for plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs) would surge sharply. This is because these advancements would make the electric vehicles highly competitive, in terms of the total cost of ownership.

Hence, it can be said with surety that the electric vehicle industry would register a massive fall in the near future, mainly due to the various restrictions and lockdowns in several countries and the slumping global economy, on account of the COVID-19 pandemic. However, the market would recover and start exhibiting huge expansion once the situation improves.