A Look at the Electric Vehicle Market in 2022

• According to Deloitte, the global electric vehicle (EV) market is forecasted to grow at a CAGR of 29% between 2020 and 2030. Total EV sales are estimated to grow from 2.5 million units in 2020 to 11.2 million units in 2025, to reach 31.1 million units by 2030.
  
• Consumer spending on electric car purchases increased to $120 billion (USD) in 2020, a 50% increase from 2019. Governments globally spent $14 billion in 2020, a 27% increase from the $11 billion spent in 2019 in support of electric car sales.
  
• Nearly 10 million electric cars were on roads globally at the end of 2020; electric car registrations increased by 41% in 2020, despite the pandemic-related worldwide downturn in car sales.
  
• Sales of Plug-in Hybrid EVs (PHEVs) and BEVs were strong in the light vehicle market, rising to 2.2% in 2020 in the U.S., 5% in China, and 9.3% in the EU, where sales of these cars in the fourth quarter of 2020 surged by 230% over the comparable period in 2019.

Global Market Share of Electrified Vehicles Will Grow Through 2035

Key Drivers

Policy Support Accelerating Transitions

• Fiscal incentives such as subsidies, tax rebates, and sustainability-related compliance are key drivers

Better Electric Vehicle Efficiency

• Improvements in battery technology that enable extended travel range at cost parity with traditional ICE technology will continue to boost the adoption of EVs

Need for Sustainable & Cleaner Transportation

• Government efforts for vehicles that emit fewer greenhouse gases is a major growth driver

Charging Infrastructure & During Life Services

• Governments and companies are investing in charging infrastructure to improve accessibility for EV owners

Regional Electric Vehicle (EV) Market Insights

Globally, electric car registrations have grown by 41% from 2020. Europe overtook China to become the world’s largest EV market, for the first time, in 2021. Strong growth in government spending has been one of the leading factors enabling Europe’s leadership in the market.

Europe Electric Vehicle Market Report

• EV sales in Europe are forecasted to cross 12 million units in 2030. The combined sales of France, Germany, Italy, Spain, and the Netherlands are estimated to account for approximately 73.5% of total EV sales
• Even though Europe’s overall car market contracted by 22% in 2020, new electric car registrations more than doubled to 1.4 million, representing a sale share of 10% of the European market
• In large markets, Germany registered 395,000 new electric cars, and France registered 185,000. The U.K. more than doubled registrations to reach 176,000, whereas Norway’s market reached a record high sales share of 75% of the total vehicles sold
• As part of its pandemic-related response, the European Union (EU) accelerated the roll-out of electric mobility through its commitment to decarbonization in the EU Green Deal and the subsequent Next Generation EU and Recovery Plan
  • In December 2020, the EU Sustainable and Smart Mobility Strategy and Action Plan bolstered these plans for the transport sector with ambitious ZEV deployment goals

Asia-Pacific Electric Vehicle Market Report

• Asia-Pacific EV sales are forecasted to reach 11 million units in 2030
• In India, regulatory support, such as Bharat Stage VI emission standards and subsidies for electrified vehicles, are spurring EV sales
  • However, the transition is delayed by long-standing subsidies for petroleum-based fuels, growing investment in compressed natural gas infrastructure, and limited EV options from the dominant Original Equipment Manufacturers (OEMs)
• Japan has been in the vanguard of electrification in the region, with hybrids now accounting for 21% of its new car market and plans to ban ICE vehicles by 2035
  • The market domination of hybrids will continue for far longer in Japan than in many other advanced economies due to the relatively low per-person miles driven annually, regulatory environment, and the technology roadmap of OEMs

Americas Electric Vehicle Market Report

• U.S. EV sales are forecasted to reach 4.7 million units in 2030, growing from a little over 500,000 units in 2021
  • EV sales are expected to reach approximately 29.5% of all new car sales in 2030 from ~3.4% in 2021
• An infrastructure plan proposed in the early 2021 establishes grant and incentive programs to install 500,000 chargers, adding to about 100,000 existing charging points. California and New York will offer subsidies and tax incentives and collaborate with electric utilities to promote EV deployment
• A survey of U.S. consumers conducted in August 2021 suggests that the number of people who want an ICE- powered vehicle dropped to 64%. In addition, the Biden administration’s new infrastructure bill that earmarks $7.5 billion to expand electric vehicle charging is expected to help address a long-standing consumer concern about EV range anxiety
• Canada’s 2030 Emissions Reduction Plan will enact a sales mandate to ensure that 20% of new light-duty vehicle sales will be zero-emission vehicles by 2026, 60% of sales being ZEVs by 2030, and 100% by 2035
• Latin America is on the brink of transitioning its transport sector to electric vehicles, with 60% installed capacity from renewables (higher than the global average)
• By 2025, HEV and EV sales in Latin America’s eight emerging electric mobility markets – Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, and Paraguay – are expected to rise to 158,300 units, a 30% rise from 2018

Looking for a more in-depth analysis of electric vehicles in the automotive & aftermarket sector? We invite you to download our full 41-page special report – Automotive: Electrification Transformation.

If you are interested in discussing the current state of electrification within Automotive & Aftermarket and how it may impact your future strategic planning, please contact us using the form provided below. We welcome the opportunity to learn how we can assist you in navigating today’s M&A climate and help you maximize your strategic objectives.

Our automotive & aftermarket investment banking team has a deep understanding of the strategic, financial, and operational factors impacting middle market companies and has a long track record of success in representing companies in M&A advisory.