Report: Virus to Clobber EVs in the Short Term, and Then…?

The analysts at BloombergNEF foresee a rough year ahead for global auto sales, putting their crystal ball in alignment with everyone else’s. Hardly a shock that the worst pandemic in a century would weigh heavily on consumer spending and confidence.

For electric vehicles, however, the virus stands to rock this segment’s boat to a lesser degree than its mainstream counterparts — which isn’t to say there’s smooth sailing ahead.

With EVs, the water’s always rough. Even last year, when no new car buyer had ever heard of the coronavirus and economies were chugging along in relatively decent shape (especially in the U.S.), EV sales growth was small.

Hampered by a persistent — though steadily diminishing — problem of insufficient product breadth and range, coupled with inflated prices born of battery cell expense, EV sales in the U.S. rose from just under 239,000 vehicles to 242,000 units in 2019. Tepid growth in a market that sank, overall, by about 1.5 percent.

The world over, EV sales grew only 5 percent against an overall industry decline of 4 percent last year. A downturn in the economy of the world’s most prolific EV consumer, China, did a number on the electric vehicle’s growth rate.

Globally, BloombergNEF expects new vehicle registrations to sink 18 percent in 2020, Reuters reports, which is actually less of a drop than combustion-engined vehicles. That cohort will see their numbers fall 23 percent, BNEF projects. As EVs attract both higher prices and a certain class of clientele, their volume isn’t seen as quite as vulnerable to market forces like a virus. As well, the number of new EVs on the market is, like their range, growing, helping spur adoption.

“The COVID-19 pandemic is set to cause a major downturn in global auto sales in 2020,” said Colin McKerracher, head of advanced transport at BNEF, adding, “The long-term trajectory has not changed, but the market will be bumpy for the next three years.”

In the U.S. at the very least, the new vehicle market was already expected to remain cool for a period of years, with Europe looking much similar. Speaking of that region, restrictive legislation and stringent emissions mandates mean the future looks bright for EVs, whether automakers want to sink money into their development or not. They don’t have a choice.

Many programs were already bearing electrical fruit or were well underway when the pandemic hit; most will proceed, though it remains to be seen just how much of an impact the economic hit from the coronavirus will have on future EV development spending.

Looking far into the future, BNEF sees electric vehicles making up 31 percent of the world’s road-going fleet by 2040, with 58 percent of new vehicle registrations that year coming from EVs.

[Image: Nissan]