Bloomberg — The world is about to pass another important milestone in the adoption of electric vehicles: 20 million vehicles on the roads worldwide for June, according to BNEF estimates. That’s a remarkable growth from just 1 million electric vehicles on roads in 2016.
In the second half of 2022, almost one million electric vehicles per month will be added to the global fleetaccording to BNEF estimates. That’s about one every three seconds. the vehicles are eventually removed from the fleet due to age, wear, shock and battery degradation. But that’s not a big part so far, mainly because the majority of EVs in the world fleet were sold in the last 18 months. By the end of 2022, BNEF expects there to be more than 26 million plug-in vehicles on the road.
The growth rate is much faster than many expected leaders in the automotive and oil industries just a few years ago. In BP’s 2016 outlook (BP), for example, the company expected a fleet of 71 million plug-in vehicles on the road by 2035. According to latest sales data, BNEF now expects that to be achieved by 202510 years ahead of schedule.
Taking a look at geographical breakdown of vehicles, you can see illustrated how only a few regions are driving most of the adoption. China accounts for 46% of total sales till the date; followed by Europe, with 34%. North America ranks a distant third with 15%but new political support should push the EV market forward this year and next. All remaining countries combined make up just 5% of the global EV fleet.
Most of the world’s plug-in vehicles are fully electric, but there are also 5.3 million plug-in hybrids. Europe represents the majority of them. Plug-in hybrids have helped automakers meet Europe’s increasingly stringent targets for reducing carbon emissions from vehicles. At BNEF, we expect the market to move away from plug-in hybrids in the coming years, as governments cut subsidies for them and automakers launch their latest all-electric models.
The adoption of EVs in Japanthe largest automotive market after China, the US and Europe, it has been very slow. That should start to change soon, as Japanese automakers launch new battery electric models in the popular mini segment “autokei”. Kei is the abbreviation for keiji doshawhich stands for light car, and they account for a third of all sales in the country. Nissan (7201) yMitsubishi (8058) plan to launch electric kei models on the market this year, followed by Honda (HMC) in 2024 and the Toyota subsidiary (MT)Daihatsu, in 2025. The Adoption of electric vehicles in South Korea has been rapidand the EVs reached almost 15% of sales there at the end of 2021buoyed by strong model offerings from Hyundai national leaders (005380) and That (000270).
Possibly, attention will shift to the world’s large emerging auto markets such as India, Brazil, Mexico and Southeast Asia. The adoption of EVs has only just begun in these countries and regions. However, they are key to continued growth in global EV adoption once larger markets begin to become saturated. There are several encouraging signs. In India’s three-wheeler market, more than 50% of sales are already electric. Southeast Asian markets such as Vietnam already has a relatively high adoption of electric two-wheelers. and sectors of Latin America are leading the way towards electric buses and starting to focus on the electrification of taxis.
The next few years will bring remarkable progress in EV adoption, but it is worth keeping in mind what a daunting task it is to convert the world’s vehicle fleet. BNEF estimates there are 1.2 billion light passenger vehicles on the world’s roads. AN end of 2022, just over 2% of them will be electric. There is still a long way to go. But momentum is building.