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| Tesla electric car at a charging station in Hawthorne, California, USA. (Source: Shutter Stock) |
The US government is planning to change car emissions standards, which will force automakers to introduce more electric vehicles. By 2032, electric vehicles are expected to account for about two-thirds of all new cars sold in the US.
Top priority
According to analyst Matthias Heck of the famous credit rating agency Moody's, the targets set by the US Environmental Protection Agency (EPA) are feasible, but will not be easy and will require high investment.
Electric vehicles will become more attractive to consumers over the next decade as battery technology improves, prices fall, and government incentives, such as incentives under the new Inflation Reduction Act, kick in.
“It’s not going to be an overnight flood of electric vehicles on American roads,” said Chris Harto, transportation and energy policy analyst at Consumer Reports. Eighty percent of cars on the road in 2032 will still run on gasoline, but when consumers are considering buying a new car, they will consider an electric vehicle.
In terms of price, according to Mr. Harto, electric vehicles will cost the same or less than gasoline-powered vehicles. The operating range of electric vehicles will be extended due to easy access to fast charging stations and significantly reduced operating costs.
Battery capacity per charge and charging speeds are both expected to increase by about 30% over the next few years. As the charging network improves, electric vehicles will become less of a hard sell for consumers who want a good, affordable vehicle.
2032 will also see more electric vehicles. According to Elizabeth Krear, vice president of electric vehicles at JD Power, the current market share of electric vehicles is 8.5%, and she expects that number to increase to 27% by 2026.
In California, where electric vehicles are more popular and have more models, the share of electric vehicles in new vehicle sales is expected to reach two-thirds by 2032.
California plans to allow the sale of only fully electric vehicles by 2035, a goal it is on track to achieve, according to Corey Cantor, an analyst at Bloomberg NEF. As a result, electric vehicles are likely to account for more than 80% of new car sales by 2032, and California itself is a major factor in the overall US car market.
Record sales growth
The EU has agreed to ban the sale of new petrol and diesel cars from 2035, as part of the 27-nation bloc's efforts to build a carbon-neutral economy by 2050.
According to official figures released by the European Union (EU) in early February 2023, electric vehicle sales in the EU increased to a record in 2022, in the context of EU countries' efforts to replace vehicles using fossil fuels.
Electric car sales accounted for 12.1% of new car sales, up from 9.1% in 2021 and 1.9% in 2019, according to the European Automobile Manufacturers Association (ACEA).
Traditional petrol and diesel cars continue to lose ground in the EU market, although they will still account for more than half of the region's car sales in 2022, at 52.8%.
2022 is a year of strong growth for hybrid cars in the EU market, with a market share of 22.6%.
Strong sales of electric cars in Germany have contributed to expanding the market share of this product in the EU market.
In Norway, four out of every five new cars sold are electric, an impressive result for a country that aims to end the sale of fossil fuel-powered cars by 2025.
ACEA President and CEO of French automaker Renault Luca de Meo said European automakers are investing 250 billion euros ($272 billion) in electric vehicles.
The auto industry is growing rapidly, but the number of public charging stations has not kept pace.
At the moment, in EU countries, the speed of station installation is limited to 2,000 stations/week, while 14,000 stations need to be installed weekly to ensure the transition.
The boom in electric vehicle sales in Europe can be explained by better supporting infrastructure. In the US, car buyers have more choices and more attractive prices. In Europe, buying an electric car is easier than buying a gasoline car, due to the shift in priorities of suppliers of components and spare parts.
Leading position
Of course, the world’s largest electric vehicle market is China. Over the past two years, annual sales of electric vehicles in the world’s most populous country have increased from 1.3 million to a whopping 6.8 million.
China is expected to continue to lead the global electric car market by 2023, far surpassing the US and Europe. According to UBS analyst Paul Gong, electric car sales in China are expected to reach 8.8 million units this year.
The key to China building and managing such a large electric car industry today comes from financial backing and support for electric car battery development from the Chinese government.
For the Southeast Asian market, the question is whether people with relatively low incomes can afford to buy electric vehicles or not? Are there enough financial resources to invest in building an electric charging system?
Compared to European countries, the region's charging infrastructure is still in its early stages, and the high price of electric vehicles is not affordable for ordinary consumers. Most countries still rely heavily on fossil fuels for electricity generation, so the use of electric vehicles cannot actually reduce carbon emissions.
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