This year’s global EV sales are on track to hit 15 million units.

By Jeff Lee 2023-02-13

3.5% of last year’s Taiwanese car market’s registration number were EVs, roughly sitting at 15k units and a global EV sales ratio of 0.14%, vastly lower than the new car market’s 0.55%. From another perspective, this means Taiwanese EV promotions still have a lot to improve. Most potential new car buyers’ considerations and obstacles to switching from ICE to EV will gradually be obsolete in three years. In addition, the global car market trend is reaching new heights from last year’s astounding 10-million EV achievement.

After EV’s remarkable sales of 10.8 million units globally last year (including BEV and PHEV, detailed statistics TBA), the electrification trend has spread to every major global market; of which the Chinese market stood out with 6.8 million annual sales, establishing the country’s dominance in the EV age. Among such flourishing EV markets, non-technical or production factors, such as industrial policies, vehicle acquisition incentives, car pricing strategies, etc., all affect this year’s EV growth.

  • The Chinese government’s thirteen-year-old NEV subsidy policy ended at the end of last year (while the vehicle acquisition tax exemption will expire at the end of this year), affecting roughly 10k RMB for each EV pricing (high-durability models have higher incentives and, in turn, more impact on their pricing). On the other hand, ICE cars’ vehicle acquisition tax exemption also ended at the end of last year, receiving a similar impact as EVs. However, since the start of this year, Shanghai and other large cities have issued regional NEV vehicle acquisition subsidies. Adding the ICE car replacement effect caused by Tesla’s price cuts in the Chinese market, EV sales performance in the Chinese market this year is still promising. In my previous article, I conservatively estimated this year’s Chinese EV market has a chance to surpass 8 million units, and Chinese institutes have a more optimistic estimation of 8.5 million units, equalling a 25% annual growth. In other words, China’s EV market penetration will smash 30% and march onto another milestone of 35%.
  • The US market’s below-7% EV penetration rate last year and the passing of the IRA bill will be detrimental to global automakers’ mid and long-term development in the US market. Additionally, US EV pricings are staying high (the average price sits at 65k USD), while over 70% of car buyers have a budget below 50k, signifying another obstacle for the US auto market’s electrification process aside from a slow public charging equipment deployment progress. If the US government persists in its policy to protect domestic car makers, EVs will probably stay overpriced in the short term. I estimate this year’s US EV market scale will struggle to hit a million units, with an annual growth of less than 20%.
  • The European market has been actively pushing vehicle electrification, with its EV penetration rate comparable to that of the Chinese market. The market’s BEV and PHEV sold 1.58 and 1.01 million units last year, coming in at a combined sales of 2.6 million and an overall market penetration rate of over 20%. With many countries’ EV acquisition incentives ending in the middle of last year, this year’s sales performance shouldn’t be affected. In the meantime, Chinese self-owned brands’ EV export to Europe is getting stronger, stimulating European automakers’ adaptive EV and sales strategies. As a result, this year’s European EV market will top 3 million units with ease, and the rest is up to whether the supply chain productivity of traditional European carmakers and Tesla’s Berlin Gigafactory can match the market’s demands.
  • India surpassed Japan last year for the first time, becoming the world’s third-largest auto market, with passenger car sales and commercial vehicles hitting 3.4 million units and 4.7 million units, respectively. Because of India’s 1% EV penetration rate last year, Chinese self-owned and Korean brands actively setting up EV retail strategies, and the Indian government’s EV subsidy policies for automakers, the country is on track to be the next star of the auto market in the coming years.
  • Last year, the Japanese car market fell to its lowest point in forty-five years, with 4.2 million units and 40% being the Japanese-exclusive K Car. Moreover, due to last year’s domestic EV development delays, imported EVs now have a window to enter the market. Naturally, the success of the Japanese market’s electrification process still relies on several Japanese auto giants’ ability to adjust strategies and catch up, or else the country’s auto market prospect will have to endure substantial changes.

In conclusion, this year’s global EV sales won’t be hard to top 14 million units. As for the next milestone, the possibility of hitting 15 million units mainly depends on European automakers’ productivity, battery price fluctuations, and global markets (barring the US) acceptance of Chinese self-owned brands to come up with more precise estimations. I believe the annual market trend will be clearer after Q1.