2020 was a crucial year for the electric vehicle industry, with many electric vehicle manufacturers planning the launch of new models to increase their market presence. But, the COVID-19 outbreak has changed the picture altogether, for all stakeholders. The electric vehicle market, which was estimated to cross the 3 million-unit mark in 2020, is now projected to fall by 15.0%, to 1.8 million units, in 2020, from the 2019 level.
The largest electric vehicle market, China, which accounts for around half of the world’s electric vehicle sales, is expected to fall by 14.0% in 2020. Other major markets, such as the U.S., Canada, and Japan, are also witnessing the heat of the situation. However, the electric vehicle sales forecast in most of the European countries is still positive. New supportive government policies in countries such as Germany and Italy and the European Commission’s pledge to reduce greenhouse gas (GCG) emissions by 50–55% by 2030 are acting as the catalysts for the electric vehicle market in the region.
OEMs’ Usage of Digital Sales and Promotion Channels to Enhance Engagement with Customers is Key Market Trend
The most visible remedy being used by governments around the world to curb the spread of the virus is a lockdown or curfew at virus hotspots. People’s movement has been severely affected due to COVID-19, which has greatly impacted offline lead generation and sales promotion activities. To overcome this, original equipment manufacturers (OEMs) around the world are launching online platforms to proactively engage with prospective buyers, through digital channels, and share the leads with their dealer partners. For players operating via the online mode, sales may get accelerated in the post-COVID-19 environment.
Supply Constraints Are Impacting Global Electric Vehicle Market
China is a major global supplier of electric and electronic components for electric vehicles and also a battery manufacturing powerhouse. The country is dealing with a slowdown since the outbreak of COVID-19, which has led to delayed production across a number of battery production facilities, located in key coronavirus-hit provinces. Moreover, mass casualties, job losses, food insecurity, and several other issues have led to the mass exodus of people living in major cities and towns, which will further amplify the production shortage. It is estimated that due to the pandemic, the output of Chinese battery manufacturers will fall by around 26 Gigawatt-hours (GWh) in 2020.
Globally, electric vehicle manufacturers are aiming to secure their battery supply chains and gain independence from the current supremacy of Chinese electric vehicle component suppliers. The industry’s overdependence on China has been showcased recently, with the coronavirus outbreak leading to disruptions in the supply of components.
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COVID-19 Has Prompted Industry stakeholders to Re-Examine Strategies
The crisis has prompted many industry stakeholders to re-examine their strategies and prepare for the auto industry's medium– and long–term growth, by accelerating the transformation and upgradation of the industry. The electric vehicle market had started witnessing rapid growth in the last couple of years, but the adoption of electric vehicles might now take a hit, as governments will be more focused on the core reconstruction of the whole industry during the next 12 months. However, the post-COVID-19 world is expected to witness high sales of vehicles for personal use, as people try to maintain social distancing and opt out of using public transport or shared cabs. Therefore, electric vehicle manufacturers should be more prepared to counter this shift and look forward to increasing their market share with new strategies, partnerships, and product offerings.
The major player in the global electric vehicle market are Tesla, Inc., BYD Company Ltd., General Motors Company, Groupe Renault, Mitsubishi Motors Corporation, Nissan Motor Company, Toyota Motor Corporation, Volkswagen Group, and Ford Motor Company.