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Electric Vehicle Market Will Keep Growing Despite COVID-19

April 24, 2020
Technological advancements in EV charging and substantial investments from automakers in EVs are some of the major factors driving the growth of electric vehicles

Despite the impacts of COVID-19 on the workforce and factory operation, the electric vehicle market is expected to grow in the near future, according to research by Markets and Markets.

Post COVID-19, market size is projected to reach 4.18 million units by 2021 from an estimated 3.42 million units in 2020, at a CAGR of 22.1%. The projection for 2021 is expected to be down by 34% as compared to the pre-COVID estimation Increasing vehicle range per charge for electric vehicles and the growing sensitivity of various governments toward a cleaner environment are the key factors driving the growth of the global electric vehicles and its infrastructure market.

Technological advancements in EV charging and substantial investments from automakers in EVs are some of the major factors driving the growth of electric vehicles. Thus, the electric vehicle market is expected to grow significantly in the near future.

The adoption rate of electric vehicles is increasing, and many countries across the globe are investing heavily in R&D. Countries such as Canada, France, India, the Netherlands and France have introduced various campaigns to boost the adoption of electric vehicles. However, because of the COVID-19 outbreak, the global automobile industry is facing a slowdown due to the lockdown in several countries that has restricted the production of electric vehicles.

The operations of some crucial companies affected by COVID-19 epidemics include Nissan Motor Co., Kia Motors Corp., BMW AG, Daimler AG and Tesla Motors. Most of these companies have shut down their electric vehicle production facilities and shifted their focus towards the manufacturing of personal protective equipment.

The government stimulus packages in the future could help the EV market get through an economic crisis brought by COVID-19 by investing heavily in charging infrastructure. China is one of the countries set to make such an investment to help stimulate its automotive industry. The Chinese government has emphasized “new infrastructure” as part of a stimulus strategy to boost its economy after the slowdown caused in part by trade tensions and coronavirus. Thus, most governments from affected regions have resorted to infrastructure rehabilitation as an economic stimulus method.

As the impact of COVID-19 related lockdowns spread during the first quarter of 2020, global electric vehicle sales in major markets, including Europe and the US, are expected to fall significantly. Falling consumer demand, disruption to upstream and downstream supply chains, and government guidelines have now resulted in the suspension and curtailment of production at major automotive OEMs and battery manufacturers. European and US automakers have delayed Asian Li-ion battery shipments initially scheduled for Q2 2020 amid the growing uncertainty for automotive demand.

Some of the major players in the electric vehicle and electric vehicle infrastructure market are Tesla (US), BYD (China), BMW (Germany), Volkswagen (Germany), and Nissan (Japan), LG Chem (S. Korea), Panasonic (S. Korea) and Bosch (Germany) among others.

Tesla is one of the leading players in this market. The company is continuously delivering new advanced electric vehicles and charging technologies. Despite COVID-19 impact, Tesla delivered more than 88,000 electric vehicles in the first quarter of 2020, surpassing Volkswagen sales. The company has the potential to manufacture highly innovative automobiles and has proved it over a period of time. The company has kept making deliveries in the US despite shutting down production at its Fremont, California factory, and it also started delivering the Model Y — its fifth electric vicle — this quarter as well.

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