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Is this the Tipping Point for the EV market…

by , 02 February 2021
Is this the Tipping Point for the EV market…
2020 was a horrible year for many industries…

But this one enjoyed record-shattering growth!

So much so, commentators across the world believe it could be at a tipping point.

The industry?

Electric Vehicles!

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EV Sales and market share BOOMED in 2020!
 
One of the first things people put off buying during a crisis is cars.
 
It wasn’t any different when the coronavirus pandemic hit. Moody’s estimates global car sales dropped by 16% in 2020.
 
Interestingly though, 2020 turned out to be a banner year for electric vehicle (EV) sales.
 
EV sales around the world increased in 2020…even with the pandemic.
 
Globally, sales of electric vehicles (EVs) increased 43% from 2.26 million in 2019 to 3.24 million in 2020. 
 
What’s more, battery electric vehicles and plug-in hybrid electric vehicles upped their global market share from 2.5% in 2019 to 4.2% in 2020. That’s a whopping 68% increase in market share!
 
The increase was mostly driven by Europe, where EV sales increased by a whopping 137% from the previous year.
 
European consumers flocked to cheaper EVs such as the Renault Zoe, the Volkswagen ID.3 and the Hyundai Kona.
 
Tesla also made its mark with deliveries around the world recently hitting close to 500,000. That’s almost a fivefold increase from deliveries-only three years ago.
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The EV market’s global share is set to keep rising!
 
Bloomberg New Energy Finance estimates the market share for new EV car sales around the world will increase to 10% by 2025, and reach 28% by 2030.
 
And there are two main reasons for this…
 
Firstly, EV prices are falling fast, thanks to the falling cost of batteries.
 
In fact, battery prices have plunged 87% over the past 10 years…
 
From $1,000 per kw hour in 2010, to $156/kWh in 2019. And BloombergNEF expects prices will reach $100/kWh by 2023 – another 36% drop.
 
Secondly, government policies are changing…
 
Take the UK, who recently banned diesel and petrol car sales by 2030. While UK annual new car registrations dropped by 29% last year, EV’s market share is up by 10.7%.
 
In the EU, regulations are in place that will penalise automakers if the average emissions of their products exceed a certain threshold. This has already prompted automakers to lower the prices of their EVs to avoid the penalty.
 
So far, eight out of the 10 largest world economies have set up net zero emission targets in the next decade.
 
Now with Joe Biden in the White House, the US will increase that number up to nine.
 
In fact, Biden is looking to set a net zero target for the US before his term is over and has pledged trillions for the transition.
 
Just last week, he pledged to phase out the US government’s vehicle fleet — including cars, trucks and sports utility vehicles — and swap it with clean EVs made in America.
 
For perspective, the US government had more than 645,000 vehicles in its fleet as of 2019, of which 224,000 comprised passenger vehicles. Just around 3,200 units were electric as of July 2020.
 
So, the transition of the entire government fleet to EVs will open huge opportunities for EV makers like Tesla, Volkswagen, GM, Ford, NIO Limited and Workhorse Group.
 
Investors should focus on these companies if they want to make great money from the EV revolution.
 
See you next week.
 
Joshua Benton,
Managing Editor, Real Wealth
 
P.S. If you want to find out my top pick in the EV sector, make sure you read my latest issue of South African Investor, released on Friday. You can claim a free trial here


Is this the Tipping Point for the EV market…
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