Electric car sales in 2020 broke all records amidst the crisis caused by the pandemic
As the Covid-19 pandemic unfolded in early 2020 and lockdowns were implemented in countries around the world, global car sales experienced an unprecedented drop. Despite gradual recovery over the course of the year, early market data suggests that global car sales contracted in 2020 by an estimated 14 per cent year-on-year, mirroring closely the IEA estimate of 15 per cent. The drop in global car sales in 2020 was significantly larger than the one observed during the global financial crisis of 2007-2009.
As the pandemic began to surge in early 2020, there was a general expectation that electric car markets would likely be more resilient than the general automotive sector although a drop in electric car sales was generally expected nonetheless, albeit a smaller one than overall car sales. The IEA estimated a slight increase in global electric car sales despite the pandemic, and suggested that this could be higher if additional stimulus measures were taken.
Electric car sales in 2020 exceeded these expectations. Backed by existing policy support and additional stimulus measures, the IEA preliminary estimate is that electric car sales worldwide climbed to over 3 million and reached a market share of over 4 per cent, making 2020 a record-breaking year for electric mobility. This is equivalent to a growth of over 40 per cent in global sales from the 2.1 million electric cars sold in 2019, and marks a return to the two-digit growth rates observed in the period 2010-2018. As a result, there are today more than 10 million electric cars on the road globally. While impressive, the share of electric vehicles in total car sales is still only one-tenth that of conventional SUV sales.
China and Europe are the engines of electric car markets
The 2020 story of global electric car sales is a drama with two acts. In the first half of 2020, lockdown measures paralyzed manufacturing facilities and supply chains on the one hand, and consumer demand on the other. This was the case in February to March in the People’s Republic of China, and from March to May in European countries and in the United States. The lockdown affected electric car sales, but there were early signs of electric vehicle market resilience for two main reasons. First, policy support was strong – in particular in Europe as 2020 was an important target year for emissions standards. Purchase incentives increased, notably in Germany. Second, continued declines in battery costs, upgraded original equipment manufacturer (OEM) offers in both model choice and performance, fleet operators initiating their technology transition and the enthusiasm of electric car buyers (often affluent households less affected by the economic downturn) provided fertile ground for continued EV uptake.
Over the first half of 2020, global electric car sales were on average 15 per cent lower than over the same period in 2019. The notable exception was Europe where electric car sales were 55 per cent higher on the back of existing policy support schemes.
Global market trends were markedly different in the second half of 2020, when lockdowns were lifted or relaxed for some time, and the automotive market started to recover. For electric cars, monthly sales surpassed those between July and December in 2019 in every month in all large markets including China, the European Union, India, Korea, the United Kingdom and the United States, despite second waves of the pandemic.
The result for the entire year was that electric car sales in Europe more than doubled over 2019 levels: many of its large markets such as France, Italy, Germany and the United Kingdom actually had significantly higher electric car sales than in 2019 throughout almost each month of 2020. In China, electric car sales were 12 per cent higher year-on-year. Both in Europe and China, electric car sales reached about 1.3 million in 2020, which translates into a share of electric cars in total sales of about 10 per cent in 2020 in Europe, and 5 per cent in China. In the United States, despite a lack of EV stimulus measures at the federal level, electric car sales were 4 per cent higher than in 2019 in a car market that shrank by 15 per cent. This suggests that car buyers have a continued attraction to electric cars. In Canada, too, electric car sales dropped less than the overall market. Japan and Australia are the only major markets where electric car sales dropped more than overall car sales in 2020.