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Global EV Market Outlook: China, U.S., and Europe

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My latest column focused on electric vehicle (EV) trends in Europe and some perspectives on EV impact.

This column provides a global EV market outlook, including EV trends in China, the U.S., and worldwide, as well as the top 5 EV brands with a few EV impact perspectives. The data came from multiple sources and are listed where used.

China trends

China is the largest market for auto sales and the leader in transitioning to EVs. China has had a long–term strategy to be a major player in EV technology. China was, to a large extent, dependent on the intellectual property and production expertise of the auto industry outside of China for internal–combustion–engine vehicles (ICEVs). This led to joint ventures with auto OEMs in Europe, Japan, South Korea, and the U.S. for most of the leading Chinese players.

China was determined to be a leader in EV technology and its supply chain and has been successful in reaching such a status today — especially in battery technology and production segments. China has several EV startups that followed Tesla’s strategy, such as Nio, Xpeng, and others. BYD was an ICEV startup in 1995 and has become a leader in both EVs and battery production. The Chinese ICEV companies are also rapidly moving to EV production.

China auto sales and production statistics are available from the China Association of Automobile Manufacturers (CAAM).

The next table has passenger car sales, including battery electric vehicle (BEV) and plug–in–hybrid–electric vehicle (PHEV), data from CAAM for 2020–2021 and the first half of 2022. Passenger car sales reached 20.18 million in 2020 and increased to 21.48 million in 2021 — a 6.5% increase.

BEV sales grew over 173% in 2021 — from 1 million units in 2020 to over 2.7 million in 2021. PHEV’s did well and increased from 247,000 in 2020 to 600,000 in 2021 — a growth of 143%. The combined sales of BEVs and PHEVs jumped over 167% from 1.25 million in 2020 to 3.33 million in 2021. BEV is clearly the preferred EV category and accounted for 82% of EVs in 2021.

EV market shares increased in 2021 and reached 15.5%, compared with 6.2% in 2020. BEV market shares jumped from 5% in 2020 to 12.7% in 2021. EV market shares in the first half of 2022 reached 24%, with BEVs accounting for nearly 19%.

China EV exports

China’s growing expertise and EV production has increased its automotive export to a variety of countries, including Europe for EV models. The next table shows data for 2020, 2021, and the first half of 2022.

The above data from CAAM shows that EV exports from China increased more than 4× from 2020 to 2021. EV shares of China auto exports more than doubled from 9.1% in 2020 to 2021. In the first half of 2022, EV exports reached 20.7% of the total.

Based on an article from InsideEVs, a large number of EVs sold in Europe in 2021 were produced in China. Of 1.2 million passenger EVs registered in Europe in 2021, over 175,000 units were made in China — a 14.5% market share.

However, most of these EVs were made by OEMs with U.S. or European connections or ownership, such as Tesla, Dacia (Renault), Polestar (Volvo), and BMW. These brands accounted for about 85% of Chinese EVs sold in Europe.

It is likely that this trend will continue, and Chinese EV brands have the potential to increase their future market share. Some Chinese EV startups are already doing well in Europe. Will the U.S. be next?

U.S. trends

The U.S. has been slower than China and Europe in moving to EVs and is likely to lag for many years. Cumulative EV sales passed 2.6 million in April 2022 and should top 3.1 million at year–end 2022.

Tesla has been the primary factor in convincing auto buyers to switch to EVs. Tesla has been the overwhelming leader, with a BEV market share of about 77% and nearly 60% of EVs in 2021. No company can retain such a high market share in any industry, and Tesla’s market share is declining as other OEMs are introducing popular BEVs.

The next table summarizes U.S. EV sales from 2014 to the first half of 2022. The 2011–2019 data is from the Transportation Research Center at Argonne National Laboratory. This data goes back to 2011 and also has data on hybrid EV sales starting in 1999.

The 2020 to 2022 data is from various articles from InsideEVs’ website.

EV sales have grown rapidly — from 119,000 units in 2014 to 608,000 in 2021. BEVs have outsold PHEVs in the U.S. since 2014. In 2021, BEV sales were 3.4× larger than that of PHEVs.

EV sales are a small but growing portion of total U.S. auto sales, at below 1% through 2016. In 2021, EV sales reached 4.15% of total light vehicle sales, with BEVs at over 3.2%. In 2022, EV sales shares should be well above 5%. PHEV shares are also increasing but will eventually peak as BEVs are the long–term winner.

Worldwide trends

Worldwide EV sales are increasing significantly, as shown in the next table. The data is from EV–Volumes, a Swedish company that tracks all EV segments and has the most detailed EV data I have seen.

Worldwide EV sales shares of light vehicles have increased from 0.44% in 2014 to 9.49% in 2021. In the first five months of 2022, EV market shares increased to over 12.3%. BEV shares have increased from 0.27% to 6.65% in the same timeframe, with further increase to over 8.7% in 2022.

Worldwide EV unit sales have jumped from 315,000 in 2014 to nearly 6.5 million in 2021. BEV unit sales increased from 192,000 in 2014 to nearly 4.6 million in 2021.

Top 5 EV OEMs

Tesla has been the leading sales brand since the Model 3 got in volume production in 2018. Tesla is likely to remain the BEV leader for several years but may be surpassed when PHEVs are included.

The next table shows the top 5 global BEV brands for 2020 and 2021. The data is from InsideEVs.

Tesla sold 0.5 million BEVs in 2020 and nearly doubled to 0.94 million in 2021. Tesla’s global market share dropped from 23.3% in 2020 to 20.3% in 2021. The top 5 companies had 59.5% market share in 2020, which declined to 55% in 2021. This shows the increasing competition in the BEV market as more desirable models become available from many OEMs.

The next table shows similar data for EVs, including the sum of BEVs and PHEVs. Tesla is again the leader with its BEV sales. Volkswagen was in second place both years.

The top 5 brands sold over 1.6 million units in 2020 and contribute nearly 52% of the total 3.13 million EVs sold globally. Total EV sales more than doubled in 2021 to nearly 6.5 million units. The top 5 brands accounted for over 3.3 million, or 51% of the total.

BEV implications

The growing transition to EVs, especially BEVs, have significant implications for the automotive electronics industry. This is a sample of key issues:

  • Analog chips: BEVs require many times more analog chips than ICEVs. This is due to the battery management systems and control ECUs that requires a large number of analog ICs. This BEV growth is accelerating analog technology development and production. Will analog chip production grow fast enough to keep up with BEV expansion? This article has some perspectives on analog chips in the auto industry.
  • Low–power design: To extend the range of BEVs, it is important to use low–power design for all electronics systems in the BEV. Better implementation and innovative technologies are likely to appear.
  • Software–defined vehicles: OEMs need to quickly move to software–defined vehicles (SDVs). Designing new BEV models is the perfect opportunity to embrace an SDV strategy. All the startup BEV companies are introducing SDV-BEVs. The legacy OEMs, not so much or not fast enough. Long–term, every BEV will be SDV–based. This column has perspectives on this important topic.
  • Battery–swapping stations: Battery–swapping stations are having success in China — especially Nio, which has done 10 million battery swaps as of early July 2022. Will battery swapping be viable in other regions?
  • Battery tech innovation: Battery technology innovation will be required, and there are multiple competitions between companies and nations for leadership in next–generation battery technologies.
  • Wireless BEV charging: Wireless BEVs are in various testing and trial stages. It has long–term potential and multiple advantages. Will it become important in five years, 10 years, or later?

The last table below has a summary of EV sales penetration for 2020, 2021, and the first five or six months of 2022. Five regions are compared.

Of the major auto–buying regions, China and the EU are well ahead of the U.S. The U.S. is likely to narrow the gap in the next five years, as many desirable BEV models are scheduled for introduction. Many of the recent popular models in the U.S. are production–constrained.

All of the regions show that BEVs are well on their way to be the dominant future EV technology. Norway shows what the future looks like in the big three regions — the question is whether this will happen by 2030 or 2035.

BEVs are on a path to become the dominant powertrain for the automotive industry. All major auto OEMs have a plan to get there and are investing correspondingly. ICEV to BEV is a transition, with upheaval potential across the whole automotive industry — OEMs, supply chains, market leaders, regional leader structures, and much more. It is not a given that current leaders (companies and nations) will retain their current position in the BEV industry of the 2030s and 2040s.

The auto buyers are seeing the momentum, too — especially in the countries and regions where investment to moderate climate change has high priority. But not everyone is convinced yet. BEVs will need more improvements and technology advances. These are on the way due to extensive investments in the required technologies from many industries.

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