Electric vehicle (EV) sales are forecasted to fall 18% in 2020 globally because of the impact of the coronavirus pandemic, according to BNEF, Bloomberg’s primary research service.
Sales of combustion engine cars are set to drop even faster this year at a 23% decline. And while the outbreak of COVID-19 will interrupt 10 straight years of growth, the long-term outlook for EVs in the automotive market is forecast to accelerate in the years ahead.
BNEF shows electric models accounting for 58% of new passenger car sales globally by 2040 and 31% of the whole car fleet. EVs will also make up 67% of all municipal buses on the road by the same year, plus 47% of two-wheelers and 24% of light commercial vehicles.
Currently, there are more than 7 million passenger EVs on the road, together with more than 500,000 e-buses, almost 400,000 electric delivery vans and trucks and 184 million electric mopeds, scooters and motorcycles.
The market for EVs is set to rise substantially as nearly all major automotive OEMs have thrown their weight into EVs as more consumers become interested in the technology and to help curb the spread of greenhouse gases.
Two years ago, GM announced it was closing five production and part plants in order to double its resources to develop electric and self-driving vehicles. GM expects 75% of its global sales to come from battery-EV architectures. But GM is not the only automotive OEM going in this direction. Ford also announced a similar plan that would include an $11 billion investment for restructuring its business with an electrification strategy. BMW is also planning to have 25 electrified models on the road by 2025.
Late last year, GM and LG Chem announced plans to invest more than $2 billion to mass-produce battery cells for future EVs.
“The Covid-19 pandemic is set to cause a major downturn in global auto sales in 2020,” said Colin McKerracher, head of advanced transport for BNEF. “It is raising difficult questions about automakers’ priorities and their ability to fund the transition. The long-term trajectory has not changed, but the market will be bumpy for the next three years.”
Fully autonomous vehicles or so-called robotaxis are set to play a much larger role in the late 2030s as the deployment of advanced driver assistance systems (ADAS) and the build-out of sensor supply chains accelerates.