Amid fears of a global auto recession, EV sales are poised for gains in 2020

Global auto sales dipped to about 90 million last year. That’s down from more than 94 million in 2018, and 95 million the year before. Even as forecasters point to continued declines in the overall auto market in 2020, we’re already seeing signs that electric-vehicle sales are set for a steep rise.

CNN reports today from Davos that some experts are speculating about “peak car,” at which point global demand for vehicles permanently declines. The biggest drop last year was in China, where the number of cars sold fell by 2.3 million compared to 2018. China’s industry minister Miao Wei said Monday that vehicle sales in the country could be flat or negative in 2020.

Yet, Bloomberg reported late last week that Tesla’s new car registrations climbed again in China last month to the highest since March. Registrations of Tesla electric vehicles rose to 6,643 in December, and 42,715 for the year. That’s a big leap from 16,360 sales in 2018.

The company’s Shanghai factory, which now assembles more than 1,000 cars a week, is expected to double output this year.

Meanwhile, in the United States, 2020 could reverse the dip in last year’s EV sales. In 2019, sales of electric vehicles fell from about 360,000 to 330,000, despite the dramatic rise of Tesla Model 3 sales.

However, last year did not bring nearly the number of EV introductions as expected in 2020. Not only is Tesla expected to have another big year with Model Y deliveries scheduled to start, but Audi, BMW, Ford, Kia, Volkswagen, Volvo, and others will introduce or expand their electric offerings.

The new models will enter the market as overall US vehicle sales continue a slow slide. It peaked at 17.55 million in 2016 but has also steadily fallen to about 17.1 million in 2019. Unfortunately, at the same time, American consumers are switching from buying cars to trucks and SUVs.

But the world’s most significant gains in EVs will be in Europe.

Tesla cars being shipped to Europe

Pulse, a Korean new service, today reported that Europe’s EV market surpassed the US in 2019, thereby becoming the world’s second-largest EV market. The agency said the rise of the European EV market, especially for total battery usage, would be a boon for Korean battery makers.

EVs and plug-in hybrids accounted for about 1.5% of all passenger cars sold across the EU in 2018. But by Q3 2019, sales of electric vehicles had already lifted to 3.1% of new registrations, according to industry data.

In the UK, car sales hit a 6-year low, with new car registrations dropping by 2.4 %. But UK electric vehicles saw a surge in demand. Nearly 39,000 electric vehicles joined the UK’s roads last year, up from about 15,500 in 2018. That’s modest compared to the 57,533 EV sales in Germany in 2019, followed by Norway selling 56,893 units.

In the next three years, the number of available EVs in Europe is expected to reach 150 models, with a concomitant surge in electric-car sales.

Market forecasters expect overall EU vehicle sales in 2020 and beyond to be stagnant at best.

Electrek’s Take

We’re barely into 2020, but it’s shaping up to be a fascinating year. That’s because overall vehicle sales are in decline as EV sales are on the rise. We don’t even have the first month of EV sales in the books, so we can only read the tea leaves.

But with Europe leading the way, and tons of compelling new EVs en route to the US, we already see the shape of things to come for 2020.

All signs indicate that the EV market share will finally break out from the single-point ceiling of the past few years. That will kill the line from EV detractors: “Yeah, but EVs are only 1 percent.”

The key questions will then become: How high could the EV take-rate get? And how fast?