Deloitte recently published a new report – titled ‘New market. New entrants. New challenges.’ – detailing how electric vehicle (EV) costs are set to keep falling and suggests the market for pure electric and plug-in hybrid vehicles is fast approaching a ‘tipping point’ that should drive soaring sales over the next decade.
After a record 2017 when sales of EVs globally passed one million units for the first time, Deloitte predicts sales of more than two million units for 2018. Moreover, there are encouraging signs such stellar growth rates can be broadly maintained.
The report predicts global sales will hit four million in 2020, 12 million in 2025, and 21 million in 2030. Such soaring demand is set to be driven by two trends that are both entrenched and accelerating.
Firstly, policy measures will continue to work to tilt the market in favour of zero emission vehicles. The Deloitte report highlights how fuel efficiency standards will push manufacturers to develop more electric models, as they work towards EU goals to ensure plug-in vehicles command 10 per cent of the market by 2025 and 22 per cent of all sales by 2030.
It is notable the report comes in the same week as reports suggest Sweden is to become the latest country to set a phase-out date for internal combustion engine vehicles, that could see sales of polluting cars and vans banned from 2030.
Similarly, separate reports reveal the Chinese government has introduced new rules purposefully designed to curtail the development of new auto factories pumping out internal combustion engine vehicles.
Secondly, and perhaps more importantly, Deloitte predicts customer demand for EVs will also be driven by the removal of the cost and technical barriers that currently hamper the market.
The report suggests the total cost of ownership for EVs is set to fall sharply over the coming decade, as ticket prices fall and running costs remain much lower than their polluting rivals. The report predicts that globally the cost of ownership for EVs will match petrol and diesel models by 2024.