EV sales could reach 25% mkt share this year

 In December 2018, I wrote a piece called  Red letter day: EVs pass 3% of car sales.  In that piece, I pointed out that EV/PHEV sales made up just 0.4% of global car sales in 2014, but by early 2018, they had reached 3.1%.  I argued that if this growth rate continued, EV/PHEV sales would reach a 50% market share by 2025.    Well, they haven't.   

In January 2025, they had reached 19%, globally.    This is still 6 times as large as in 2018, but one can't deny, it's not 50%.   Was this a bad forecast?  From their behaviour, most of the legacy car-makers clearly assumed that the growth rate in EVs/PHEVs would be linear, not exponential.  In other words, that the market share would rise by, say, 1% a year (or less!), meaning that their forecasts for the EV/PHEV market share by end 2024 would be 9% or below, not the actual 19%.  So it was a better forecast than legacy auto. 

What went wrong with my forecast?   First, Covid.  Second, I didn't understand that in the EU, they set 5-year targets for EV penetration, rather than a year-by-year increase, and the car-makers wait as long as possible before they comply, so you get a step-up every five years, rather than a smooth upward trajectory.   In the US, high tariffs on EV imports, especially from China, shielding legacy car manufacturers from competition, also meant the EV prices were higher than they could have been.  So EV sales in the USA are growing more slowly than before. And then there's been the impact of the leading EV brand, Tesla.  Its sales have plunged, globally, and competitors are still filling that gap.  

The result has been that the annual growth rate in EV/PHEV sales has slowed from 50% a year to 30% (see the second chart below)  At this growth rate the global EV market share won't reach 50% until 2028.  China is already there, with its plug-in share rising from 35% a year ago to 50% now, because EVs have reached price parity with ICEVs in China.  And in Brazil and SE Asia, EV sales are skyrocketing, though the EV market share is still low.

So what's my new forecast? Outside the USA, the plunge in battery costs will I think cause EV sales growth to pick up.  Market share in Latin America and SE Asia will rise fast, and they will become much more important markets for EV/PHEVs than they have been so far.  Chinese car-makers will sell to them as well as setting up assembly plants in them.  And at some point, the US will see how stupid it's been about EVs, and will reverse course, so EV sales there will start to grow fast again.   I'm confident EVs/PHEVs will reach 50% market share by 2028, and 90% by 2030.  We'll see, if I'm still around.