February 2022
Global sales of passenger electric cars soared to 6.6m in 2021, more than doubling from a year earlier, even as the overall car market stagnated on the back of supply-chain disruptions. The share of electric cars jumped to almost 9% of the overall car market last year, compared to 4.1% in 2020 and 2.5% in 2019.

AME expects sales of passenger electric cars to reach 9.4m in 2022, taking a market share of around 12% of global car sales. This number includes plug-in hybrids (PHEVs), but most sales will be battery electrics (BEVs).

Sales will be driven by a growing number of competitive models, tighter emissions regulations, subsidies, and fleet purchases. The gradual easing this year of the chip shortage which snarled auto output last year will help manufactures boost production to meet growing demand for electric cars.

In 2022, China is set to dominate global sales again, reaching around 5m, following sales of 3.3m in 2021. More electric cars were sold in China last year than were sold in the entire world in 2020, when global sales came in at 3.2m. The Chinese market finished 2021 on a high, with over half a million electric cars sold in December.

Europe’s electric car sales are expected to expand by around 1m in 2022 to reach 3.2m. Sales jumped by around 65% in 2021 to 2.3m, even as total car sales fell by 25%, hindered by pandemic-induced supply disruptions.

Overall, electric cars accounted for 17% of total European car sales in 2021, but there were significant differences across markets. The smaller Scandinavian counties of Norway, Sweden and the Netherlands took the top shares at 72%, 45% and 30%, respectively. Among large European economies, Germany had the highest share at 25%, followed by the UK and France, each with around 15%, Italy with 8.8% and Spain with 6.5%.

The US lags far behind China and Europe on EV adoption, but it should get a big boost this year with the release of new electric truck models such as the Ford F150-Lightning. Sales of electric cars reached 700k in 2021, more than doubling from a year earlier, and doubled their market share to 4.5%.

The supply issues that plagued the auto industry last year, primarily semiconductor availability, will gradually ease this year and return to more normal levels around the September quarter. These disruptions, however, will remain the key limiting factor for sales of EVs this year. Despite setting a new sales record in 2021, Tesla said its factories had been operating below capacity over several quarters.

Even as sales growth moderates this year, dropping to 52% from 106% in 2021, this will undoubtedly be the electrified decade. In 2012, about 130k electric cars were sold worldwide, according to IEA data. Today, the same number is sold in a single week.

 

 

Tesla retained its crown as the top EV seller last year, with sales of more than 936k, an 87% jump from 2020. New production coming on stream in Germany and Texas, and expanded capacity in both California and Shanghai, should lift sales once again in 2022.

In second place, China’s BYD sold 603,782 electric cars in 2021, an increase of 218% from a year earlier. The Volkswagen Group delivered 452,900 electric cars to customers last year, a 96% jump from 2020, even though overall vehicle sales slipped 4.5% to 8.82m. The BMW Group delivered 328,316 electrified vehicles in 2021, jumping 70% from a year earlier. Toyota’s EV sales, on the other hand, stood at just 14k vehicles, accounting for a mere 0.1% of the group’s sales and far below the 5% recorded at Volkswagen.

There are now around 16m electric cars on the road worldwide, consuming roughly 30TWhpa of electricity, the equivalent of all the electricity generated in Ireland.

Despite impressive growth in 2021, sales of electric cars are not advancing at the same pace globally. China, Europe and the US account for roughly two-thirds of the overall car market but around 90% of electric car sales.

While consumers are still concerned about the price, range and charging availability of EVs, mainstream consideration has never been higher. As EV availability expands and capability improves, more consumers will make the switch to electric in the coming years.

 

Europe

Europeans bought more electric cars than their diesel counterparts in December, as subsidies and the prospect of zero emissions prompted buyers to make the switch.

More than a fifth of new cars sold across 18 European markets, including the UK, were battery electric vehicles (BEVs), according to data from auto firm Matthias Schmidt. Diesel vehicles, which as recently as 2015 accounted for more than 50% of new car sales in the EU, slipped below 19%. Gasoline vehicles are still most popular, accounting for 40% of new car sales, but are also in long-term decline.

Sales of BEVs reached 176k in December, an all-time record, and 6% higher than a year earlier. By comparison, nearly 160k diesel vehicles were sold in the final month of 2021.

Electric car sales have been pushed higher by tightening emissions regulations and generous subsidies as the bloc strives to become a net-zero emitter by 2050. In Germany, for example, a buyer can be granted up to EUR9k (US$10,650) for an EV purchase that costs less than EUR40k (US$45,260).

By contrast, drivers are increasingly turning away from the fuel that was tainted in the 2015 Volkswagen fuel emissions scandal, when the German automaker cheated on emissions tests for diesel engines installed in 11m vehicles. Sales of diesel vehicles have also been under pressure from bans on older models in some cities, such as in Hamburg and Berlin, and increased taxes in key markets. 

 

 

Tesla was the best-selling EV brand in Europe last year, followed by Volkswagen. Tesla will be in a good position to expand its footprint when it opens a factory near Berlin this year to serve the European market.

The future for EVs in Europe looks bright. The next generation of EU engine emission rules, known as Euro 7, are due to come into force in 2025 and are expected to fuel further adoption of EVs by making ICE cars more expensive. The EU wants at least 30m electric vehicles on the region's roads by 2030—a massive increase from the 3.3m recorded in 2020.

 

United States

The US sold 57,065 electric cars in December, up 46% from the same month last year, according to data from Argonne National Laboratory. The total sales comprised 40,772 BEVs and 16,293 PHEVs. NEVs accounted for 4.78% of new light duty vehicle sales during the month.

In 2021, electric cars doubled their share of overall auto sales to 4.5%, up from just under 2% a year earlier. Federal incentives programmes were not renewed last year, but consumers can still benefit from an up to US$7,500 tax credit. However, this excludes models from Tesla and General Motors, as they have already reached the 200k manufacturing cap.

In California, the share of EV sales was a much higher 12.4%, or 247k, of the 2m new cars and trucks sold in the state last year. This puts it around four times higher than the national average.

Sales in the most populous US state rose 72% from a year earlier, while Tesla’s share of BEV sales was a whopping 75%, though down from 79% a year earlier. California has by far the highest share of EVs of any US state due to a generous combination of rebates, incentives and charging station networks. California’s budget proposal for fiscal 2022-2023 includes US$6.1bn in EV-related initiatives, up from US$3.9bn in the previous fiscal year.

The US electric car market is still dominated by Tesla, which accounts for more than 50% of all electric units sold. However, Tesla’s market share has declined from 65% in 2020 as rival models, including Ford’s Mustang Mach-E and Volkswagen’s ID.4 hatchbacks, are rolled out.

While Tesla will almost certainly remain the country’s top EV brand for the foreseeable future, the arrival of electric versions of America’s favourite car—the pickup truck—suggest its market share will continue to decrease. Ford’s F-150 Lightning pickup, the electric version of the best-selling car in the US, is set to be released this year and has already accepted over 200k reservations. It costs around US$40k. Tesla’s Cybertruck (US$40k), Rivian’s R1T pickup (US$67,500), General Motor’s Hummer EV (US$80k) and Lordstown Motor’s Endurance pickup (US$52,500) are some of the other pickups hitting the US market this year.

While the market share of EVs sold in the US remains at less than 5%, new models and expanded charging infrastructure could help drive further adoption.

US car buyers will have around 20 EV models to pick from in 2022, up from about 10 this year, and with more on the way in 2023. For comparison, there are around 300 internal combustion engine models on sale in America. The lack of choice outside Tesla is thought to be one factor holding back higher EV penetration. 

Automakers will need to roll out even more models if they want to hit their EV sales targets. General Motors wants to sell 1m EVs per year by 2025 and be an only-EV seller by 2035. Ford expects 40% to 50% of its global vehicle sales to be electric by 2030.

The US$1.2tn infrastructure bill, signed into law in November, allocates US$7.5bn to develop the nation's first network of EV chargers along highway corridors. However, this is estimated to be only about 15% of the US$50bn needed to reach President Biden’s goal of a nationwide network of 500k chargers by 2030. The larger US$1.75tn bill includes EV tax incentives of up to US$12,500 per vehicle, but it is still hopelessly stalled in Congress.

The Biden administration wants 50% of new cars sold in the country to be electric by 2030—a dramatic rise from the 1.7% (240.1kt) they accounted for in 2020.

 

China

China’s sales of electric cars totalled 498,000 units in December, jumping 10% from November and surging 121% from the same month in 2020. The total comprised 416,000 BEVs and 82,000 PHEVs. Declining raw materials prices and an easing of the power supply crunch boosted auto output, which led to higher sales.

The strength in December’s sales pushed full-year 2021 electric passenger car sales to 3.3m, soaring 153% from the previous year and reaching a record market share of 21%. Rising sales meant the share of electric cars in China’s car market jumped to 13% last year, compared to 6% in 2020.

Strong sales of electric cars last year helped reverse a three-year sales slump in the country’s overall vehicle market. A total of 26.28m vehicles were sold in the country in 2021, up 3.8% from 2020, according to data from the China Association of Automobile Manufacturers (CAAM).

Shenzhen-based BYD grabbed the top spot in the Chinese market in 2021, with EV sales of 603,783, up 218% from a year earlier. Tesla came in second place, selling an estimated 240k vehicles, accounting for 26% of the company’s global sales.

Given this momentum, China looks poised to achieve its aim of making 20% of all new auto sales NEVs by 2025 and 40% by 2030 as part of its efforts to reduce carbon emissions.

AME expects China’s sales of electric cars to reach 5m in 2022, rising 43% from the previous year, as the technology becomes increasingly mainstream, with more than 90 models set to be unveiled this year. A steady stream of electrified versions of all models of traditional fuel vehicles are being released into the Chinese market.

Sales will increase even as subsidies are cut by 30% this year as buyers rush to make purchases before the subsidies are withdrawn altogether by the end of 2022. The government previously extended purchase subsidies for two years to support the market when the pandemic struck in early 2020.

Small electric models, primarily for city driving, have been gaining popularity over the last few years. Indeed, the tiny Wuling Hongguang mini-EV, which retails at around CNY28,800 (US$4,500), has been China's best-selling electric car since its release in 2020. It is manufactured by a joint venture between SAIC (51%), General Motors (44%) and Wuling (5.9%).

 

 

Global automakers such as Volkswagen, General Motors, Toyota and Tesla are all ramping up electric vehicle production in China amid intensifying competition from domestic brands. Smaller local brands NIO, Xpeng, and Li Auto have recently begun selling over 10k EVs each per month.

Auto giant Volkswagen said it aims to double its EV sales in China in 2022, after missing its goal of selling 80-100k in 2021, with sales of 70,625 of its ID EVs.  Volkswagen produces the ID series through its Chinese joint ventures with SAIC and FAW. The German automaker said it would be capable of producing 1m EVs annually in China by 2023.

The rapid growth of electric cars also highlights the need to improve charging facilities in the coming years. China aims to meet charging demand for more than 20m EVs by the end of 2025, according to a plan released in January by the National Development and Reform Commission (NDRC).