By on May 19, 2020

Image: Nissan

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]

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9 Comments on “Report: Virus to Clobber EVs in the Short Term, and Then…?...”


  • avatar
    SCE to AUX

    Misleading clickbait headline.

    “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.”

    Alternate headline: “EVs to fare better than ICE vehicles during virus downturn, then continue growth.”

    • 0 avatar
      mcs

      I took a quick look at their data. I think their curve is off on pack prices. I think they have $60/kWh for the pack price in 2030, but, that could happen anywhere from 2 to 5 years from now. I wouldn’t be surprised to see $75 in two years. Cell prices are below $100 now and they keep improving the manufacturing processes for both cells and packs. If I was them, I’d have waited until after “battery investor day”.

      One thing both BloomburgNEF and other analysts keep missing is human nature as a factor. There is a point in time where ICE drivers will be stigmatized as either old, poor, or living in an apartment. People are image-conscious and that is what’s going to accelerate the curve. Electrification ultimately won’t be for the environment, economy, or even performance. It will be an image thing.

  • avatar
    ToolGuy

    It is impossible to purchase a new EV which the manufacturer has discontinued.

    It is impossible to purchase an EV which is not yet in production.

    It is highly inconvenient to purchase a compliance EV which is not offered for sale in one’s home state.

    It is relatively challenging for most potential customers to purchase an EV which is not stocked at the local dealer.

    Currently, EV’s are offered in a relatively limited number of body styles.

    The price of many EV’s currently for sale (the $$$ ones) is a barrier for many ‘mainstream’ customers.

    EV’s are unfamiliar for many customers, and to get an EV in the segment they desire they might have to shop a brand which is very unfamiliar.

    So yes, EV’s currently have a low actual take rate. But this doesn’t mean they couldn’t do very well with the right approach.

    • 0 avatar
      aajax

      I’m not convinced the car companies are interested in EV’s. They aren’t profitable, so why push them until there is real demand for alternatives to Tesla?

      • 0 avatar
        mcs

        “They aren’t profitable,” That’s not true. Tesla is making a profit on them. It looks like GM and their battery partner will be able to get to that point too.

        The other problem is that you don’t want to be the guy heavily invested in making steam locomotives when diesel gets perfected or the guy dedicated to making film when digital imaging takes over. If a technology breakthrough that suddenly makes an unprofitable and unpopular technology both profitable and in heavy demand comes along, you need to be able to make the switch along with your competitors. If you don’t, and they are years ahead, you are toast.

  • avatar
    Lou_BC

    “Virus to clobber”

    Since we are talking EV’s , the title should be about parasitic losses ;)

  • avatar
    la834

    I’ve long argued that home charging will prove to be the EV’s killer app; for those that don’t go on long road trips, the ability to start every morning with a topped-off “tank” will more than offset the lower number of away-from-home charging stations and long charging times compared to gasoline. But now I’m wondering if not having to deal with grubby gas pump handles will make home charging more appealing too.

  • avatar
    ajla

    twitter.com/nytimes/status/1262870680900698113

    This is a funny. Between Elon turning into a 4Chan poster and the various products on the horizon imagine if BEVs somehow became a *right-wing* symbol. Dual Gadsen flags flying behind your massive new Tulsa-built Tesla Cybertruck.

  • avatar
    dividebytube

    I was hot to buy a Tesla Model 3 LR AWD for my next car.

    Then the lockdown happened. And I was furloughed for five weeks. And when I went back to work, I was greeted with a 10% pay cut. And then the company I work for is now pushing for more furloughs because our sales are very low right now. However my amount of work hasn’t decreased – not with a reduced staff!

    Thankfully my wife is still working, though it’s a bit harder for her to hit the monthly bonus thresholds.

    Needless to say we’re in saving mode, not “Let’s buy a car!”

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