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US and European EV outlook: Driving the energy transition

  • The global electric vehicle (EV) market is booming: Sales more than doubled in 2021 and market share reached around 8%.  This positive momentum is likely to continue, with estimated growth of +50% in 2022. However, dynamics will be different across countries due to differing policies.
  • Electrified transport investment accounted for over 36% of global energy transition investments, with its share climbing above 50% in countries such as Germany and the UK. Going forward, it should remain a key driver of the energy transition. However, to avoid a supply gap of over 500,000 tons of lithium carbonate by 2030, which would harm the deployment of EVs, the sector needs to invest in both production-boosting technologies and exploration.
  • At the same time, until the market reaches a critical size, public policies will remain pivotal to accelerate the deployment of charging infrastructure and consumer adoption. 
 

2021 was a stellar year for EVs, with global sales doubling from 2020.

 
  • In absolute terms, EV sales reached 6.75M units globally in 2021. China was the most buoyant market, accounting for almost half of global sales – a number equivalent to the  worldwide total of sales in 2020. In December 2021, China New Energy Vehicle (NEV) sales accounted for 21% of total automotive sales. In 2022, as NEV subsidies will decrease by -30% before a phasing-out in 2023, the Chinese market is likely to decelerate a bit as either manufacturers or consumers will need to foot the extra costs. However, EV sales should grow by about 50% in 20222. 
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  • In Europe, sales have also risen sharply: in December 2021, EVs accounted for a staggering 29% of market share. As generous subsidies will remain in place this year and probably beyond, we expect EV sales to grow by about +60% in 2022. In the US, sales doubled in 2021 but volumes remain low (about 600,000 units, up from 300,000) and the market share of EVs stood at about 4% in 2021 - much lower than in Europe and China. Sales should continue to grow by about +50% in 2022 and 2023. Although we could have a positive surprise in the US. 2022 could be a breakthrough year if the Build Back Better plan is eventually passed. With subsidies of up to USD12,500 on EV purchases, the plan could be a game-changer for the market in the US. 

Contact

Ano Kuhanathan
Allianz Trade
Maxime Lemerle
Allianz Trade