This is an extract from the “Zero-Emission Vehicles Factbook”, a special report published today by BloombergNEF (BNEF), at the request of the U.K. COP26 Presidency and in partnership with Bloomberg Philanthropies
Since the last Conference of the Parties in late 2019, global momentum towards zero-emissions road transport has accelerated significantly. Just a few signs of progress include:
- Annual electric vehicle sales are on track for around 5.6 million units in 2021, up from 2.1m in 2019 and 3.1m in 2020. 7.2% of new cars sold globally in the first half of this year were electric, up from 2.6% in 2019 and 4.3% in 2020. The global clean road transport market will be worth around $244 billion this year.
- There are more than 500 zero-emission vehicle models available to buy globally, up 37% since 2019.
- Proposed and confirmed rules in the U.S., EU and China imply that EVs will be roughly 20-30% of car sales in those markets by 2025.
- Automakers have collectively committed to sell around 40 million EVs per year by 2030, and automakers with planned phase-outs of combustion engines now account for 27% of the global auto market.
National, regional and local governments will need to continue to raise ambition and implement stable, long-term policies that induce the growth of zero-emissions transport, and manage the phase-out of polluting vehicles. Manufacturers and technology companies will need to accelerate the development and deployment of vehicles and supporting technology, such as batteries, infrastructure and software. And the private and public sectors will need to work together to grow and develop the new supply chains and skills bases required to enable the transition in all countries.
Particular attention is needed to support the transition to zero- emission transport in developing economies. Stronger international collaboration and financial and technical assistance will be needed to accelerate ZEV adoption in these countries.
The global fleet of four-wheeled road vehicles continues to rise and currently stands at close to 1.5 billion vehicles. More than 50 million cars, trucks and buses were added to the global fleet between 2019 and mid-2021. China accounted for about 40% of the increase and, by end- 2021, the country is likely to be home to the largest fleet of four-wheeled vehicles globally. The global fleet of two- and three-wheelers is almost as big, exceeding one billion. China, India and countries in Southeast Asia are by far the largest markets for two- and three-wheelers globally.
Long-term outlooks for battery electric and fuel cell vehicle adoption have become more bullish in the last two years. Companies forecasting ZEV adoption now see tens of millions more battery electric vehicles (BEVs) and fuel cell vehicles (FCVs) on the road in the future than they expected in 2019. In its 2021 Long-Term Electric Vehicle Outlook, BNEF projects the global passenger and commercial ZEV fleet to hit 677 million vehicles by 2040. In 2019, this forecast called for just 495 million ZEVs on the road in 2040. The latest outlook sees passenger ZEVs making up 39% of the 2040 passenger vehicle fleet, up from 26% in the 2019 report.
Commercial ZEVs hit 24% of the 2040 commercial fleet in EVO 2021, up from 19% in 2019. In total, across passenger and commercial vehicles, the 2040 ZEV fleet share went from 25% in 2019 to 36% in the 2021 report. The IEA’s latest Global EV Outlook increases its BEV fleet by 7%, to 91 million in the 2021 report, from 86 million in 2019. OPEC has revised its projected 2040 EV and FCV fleet up by 11% in its most recent World of Oil publication, to 369 million EVs and FCVs on the road.
Global passenger EV sales grew by 47% in 2020, to more than 3.1 million. This surge in EV sales was in stark contrast to the overall decline in the passenger vehicle market, which was down 14% due to the pandemic. The EV surge has continued into 2021. In the first six months of 2021, over 2.5 million EVs were sold globally – over 140% more than in 1H 2019. China and Europe have led the global passenger EV and FCV market since 2015, and have stretched out their advantage in the last two years. Europe and China were responsible for 82% of global EV sales in 2020 and 84% in 1H 2021. The next largest market was the U.S. at 11% of the global market in 1H 2021. BNEF expects 2021 to be yet another record year for EV sales globally, at 5.6 million sold in total. This would put 2021 passenger EV sales 83% higher than in 2020, and 168% higher than in 2019.
The fleet of passenger electric and fuel cell vehicles has doubled in size since 2019. A cumulative total of 12.6 million EVs and FCVs had been sold up to 1H 2021, up from just 6.9 million at the end of 2019. We assume the majority of these vehicles are still on the road. This equates to just 1% of the global fleet of passenger vehicles. China and Europe are home to 76% of that fleet.
Sales of electric vans and trucks are rising but remain low compared to the progress seen in passenger cars. Only 0.8% of vans and trucks were zero-emission models in 1H 2021. Most are electric light-duty vans and trucks in some EU countries, China and South Korea.
Global zero-emission bus sales are expected to rise to over 93,000 units in 2021. While this represents 15% growth from 2020, it is essentially flat since 2019. The global zero-emission bus market has been propelled primarily by growth in China, unlike passenger ZEVs which have taken off in many markets.
Electric two-wheelers are selling in very large numbers, totaling 27 million units in 2020 – and their market share surged during the pandemic. While global sales of two-wheelers were down 11% in 2020, sales of the electric variety grew by 11%. Nearly 70% of two-wheelers sold in China, and just under 40% globally, were electric in 2020.
Direct purchase incentives, which lower the upfront cost of an EV, are an effective tool in incentivizing EV adoption, but are expensive for governments to support in the long term. China has had some of the most generous subsidies in place since 2010, but has been reducing them annually, and these are now set to expire by 2022. Supply side policies – like fleet-wide fuel economy targets – are gaining in importance.
The number of EV and FCV models available around the world has increased 37% since 2019. While at the end of 2019 there were 264 battery electric, 109 plug-in hybrid and 7 fuel cell vehicles models available globally, by the end of 1H 2021 this has already risen to 362, 151 and 9, respectively. China is leading in terms of model availability. By the end of 2020 there were 355 EV and FCV models available in China, compared to 230 in Europe and just 83 in the U.S. A lack of EV models to chose from, combined with weak fuel economy standards, are among the reasons for the U.S. lagging China and Europe in ZEV deployment.
Today the vast majority of BEVs available in the market include fast-charging capabilities in addition to the on- board charger. This feature reduces charging times, increasing convenience and helping to encourage adoption. The average range of newly launched BEV models has steadily risen over several years, reaching 400km in 2021. Automakers have been progressively extending the range capability of their offerings. In the last three years, BEV range increased at a compound annual growth rate (CAGR) of 18%.
Battery manufacturing capacity is growing steadily to meet demand from the EV market. There is currently 586GWh/year of commissioned lithium-ion battery-manufacturing capacity globally. This is nearly twice the capacity that existed just two years ago. Although China still dominates globally, in just two years, Europe has tripled its battery production capacity. By 2025, total capacity will almost triple to 2,539GWh/year.
BNEF estimates that there will be 5.4 million home EV chargers and 1.9 million public chargers installed cumulatively by the end of 2021. There have been over 2 million home and 600,000 public charger installations since the end of 2019. Home charger installations make up a higher share of total installations in Europe and the U.S. compared to China, where there is a near-even split between home and public chargers. More work is required on charging deployment in countries outside of China, Europe and the U.S. The roll-out of charging infrastructure in the rest of world and emerging economies has been slow, but slow uptake of EVs has been a factor. As EV adoption in those countries increases with improving BEV economics, charging will follow.
Total annual investment in charging infrastructure is expected to increase to over $8 billion in 2021, up from $4.6 billion in 2019 Public charging infrastructure accounts for a higher proportion of investment, even though there are fewer chargers. This is because of the higher unit cost of equipment and installation. Public charging infrastructure can, however, be cheaper per electric vehicle served, once utilization increases. These charge points can serve anywhere from five to over 100 vehicles’ energy needs in a year, compared to 1-2 vehicles for a home charger.
Many automakers have announced new EV sales targets since COP25, highlighting their growing commitment to electrification. 16 automakers have set goals that could result in 19 million EV sales in 2025. This is an increase of 44% percent since January 2020, when 11 automakers had pledged around 14 million EVs. As for 2030, 10 automakers have pledged to achieve over 40 million in aggregate EV sales. This includes Tesla’s target of selling 20 million BEVs in 2030.
There are 45 governments in total targeting a phase-out of new internal combustion vehicle (ICE) sales. This includes 18 national governments and 27 regional and municipal authorities. Since 2019, the year of the last COP, the list has been expanded by six countries (the U.K., Canada, Austria, Singapore, Chile and Greece), three U.S. states (California, Massachusetts and New York) and Quebec province in Canada. Not reflected in this figure is the proposal from the European Commission to phase out sales of ICE vehicles in the EU by 2035. This would add 19 more countries to the count. The importance of regional ICE phase-out targets should not be underestimated. Sub-national targets can drive real impact, especially in countries where national mandates are yet to be implemented.
The complete report can be accessed here