Market in Europe for battery test chamber series

Main brand of Electric vehicle market in European

The electric car revolution has become a hot investing theme in recent years as many believe it will transform the future of transport. However, there are still several barriers to the widespread adoption of electric vehicles (EVs)

The world is in the early stages of adoption, with battery electric vehicles (BEV) making up less than 1% of new car sales globally. The financial group’s base case scenario is for a penetration rate of 10% by 2030 while its bull case scenario is a penetration rate of 18%. The main barriers to adoption are the relatively high cost of EVs, limited travel range and lack of charging infrastructure.

Currently, what is driving EV development are the “push” factors on the supply side. This includes government support through taxes and incentives as well as regulations on emissions that make EVs cheaper than cars with internal combustion engines (ICE). These factors are also pushing carmakers to invest in R&D for EVs, particularly in the top three EV markets — China, Europe and the US.

The Chinese government is targeting to have two million New Energy Vehicle (NEV) units by 2020 from 580,000 last year. Meanwhile, the authors of the report estimate that 1.3 million units will need to be sold in Europe in 2020 to comply with emissions targets, compared with the 270,000 sold last year. EV penetration in the US is estimated to grow the slowest as its fuel-efficiency regulations set by the previous administration are under review and are likely to be relaxed.

The supportive policies are one of the reasons Europe and China are expected to become the largest EV markets in the world. China will continue to be the key driver of the BEV market in the near to medium term, but Europe is not expected to catch up until 2030. Europe and China are expected to remain the largest EV markets, with a compound annual growth rate of 27% and 21% respectively between 2017 and 2030.

BAIC Group — China’s biggest electric car maker — sold the most EVs in the world last year, at about 100,000 units. The company is a state-owned enterprise and its EV arm is reportedly listed on the Shanghai stock exchange under its affiliate, Beijing Qian Feng Electronics Co.

By 2020 and 2025, however, Volkswagen (VW) and SAIC Motor Corp Ltd are expected to lead in terms of absolute BEV volumes sold globally. SAIC Motor is the largest auto company on China’s A-share market.

Excluding pure-play EV manufacturers such as Tesla, BAIC and Anhui Jianghuai Automobile Group Corp Ltd are expected to have the highest EV penetration in 2025. Anhui Jianghuai is listed on the Shanghai stock exchange.

Other carmakers that will be pushing out EV models in the next few years include BMW, Porsche, Skoda and Daimler in Europe, Geely Group in China, Honda and Toyota in Japan, Hyundai in South Korea and Tesla, Ford and General Motors in the US.

There are four categories of EVs:

Hybrid EVs (HEVs); plug-in HEVs (PHEVs); electric range extended vehicles (E-REVs), which come with ICEs that are supplemented with electric batteries; and BEVs. HEVs are charged by energy recuperation while PHEVs and BEVs are charged with electricity.

Despite the growing BEV sales, the authors of the report still expect more than 90% of new cars sold in 2030 to come with an ICE. But gradually, the new cars sold will likely also have a level of electrification, such as a PHEV or HEV.