New research from Wood Mackenzie has found that global electric vehicle sales are expected to drop 43 percent by the end of 2020.
A COVID-19 pandemic, potential delays to fleet purchasing due to lower oil pricing and a wait-and-see approach to buying new cars, will all contribute to sales of EVs dropping to 1.3 million in 2020, down from 2.2 million in 2019.
Analysts felt that China will catch up to 2019 demand by November 2020, with Europe catching up in December. Sales in the US are projected to be 30 percent of what they were in 2019 by the end of 2020.
“At the end of January, sales of all cars in China were down by 21 percent compared to 2019. By February, they had plunged by 80 percent. EV sales were hit harder, with January numbers down 54 percent and February projected to be down more than 90 percent. EVs have constituted approximately 5 percent of all vehicles sales in China for the past two years,” Ram Chandrasekaran, Wood Mackenzie Principal Analyst, said. “Most new EV buyers are still first-time owners of the technology. The uncertainty and fear created by the outbreak has made consumers less inclined to adopt a new technology. Once the epidemic is contained in China, we suspect consumers will flock back to car dealers and reaffirm their confidence in EVs.”
Rebates and other incentives from car manufacturers may spur sales, he said.
But delays in manufacturing may push sales back. Traditional automakers have announced their upcoming EV models will be released over the course of the next few years, rather than the next 12 months, researchers said.
Additionally, as automakers halt production to make medical supplies during the pandemic, production may be even further delayed.
“From a consumer’s perspective, however, it makes perfect sense to wait longer for these models. After all, a car purchase is a large financial investment that lasts several years,” Chandrasekara said. “Unfortunately, for EV adoption, this is likely to lead to a plateauing of sales in the near term. While the pent-up demand from the pandemic will help a bounce back in sales later in the year, new demand growth will lack until 2021.”
Uncertainties from the pandemic, and the oil price war, would only strengthen desire to shift towards sustainability in automakers, he said.