Regulation - May 21, 2020
BloombergNEF explores EV market outlook post-COVID
BloombergNEF released a new report May 19 detailing three possible scenarios for the short-term future of the electric vehicle market following the COVID-19 pandemic considering the 7 million passenger EVs that are on the road right now.
In all three of the scenarios imagined in BNEF’s EV report, markets in Europe, China and South Korea would see a reduced impact if strong policy support, stimulus measures, ambitious fleet electrification targets and local automakers’ commitments were put in place. In the U.S., a lack of federal support in these measures would affect EV sales even worse.
The first scenario envisions an optimistic future in which global EV sales increase by around 3% in 2020 due to a quick and strong policy response combined with a growing demand for new models. In this scenario, EV sales could reach 6.1 million in 2023 with little impact from the pandemic.
A second scenario could be seeing EV sales fall 18% compared to 2019. According to the report, EV sales would bounce back to 2.6 million by 2021 and 4 million by 2022 under this scenario with a “v-shaped” recovery.
“The next 20 years will bring significant changes as electrification, shared mobility, vehicle connectivity and, eventually, autonomous vehicles reshape automotive and freight markets around the world,” the report states. “Technology changes are at the core of this transition, but other factors are also playing an important role. Policymakers are driving the automotive market toward low-carbon options and improved fuel efficiency. Countries are competing to build the next clusters of high-value industry. Automakers and large fleet operators are taking long-term decarbonization targets increasingly seriously. Meanwhile, urbanization continues its steady march around the world, leading to increased concerns around congestion and urban air quality, and changing consumer preferences.”
Currently, the writers of the report see the second scenario as the current base case.
The third scenario accounts for prolonged COVID-19 outbreaks into 2022, which would cause EV sales to fall into 2021. This scenario predicts that the market would start growing again in 2022 and reach sales of 3.3 million in 2023.