[ferro-alloys.com]Global sales of electric passenger vehicles will fall 18% in 2020, to 1.7 million worldwide, as the coronavirus pandemic dents consumer spending, according to a Bloomberg New Energy Finance report Tuesday. However, this will be offset by an even bigger drop in sales of traditional combustion engine cars.

BNEF said in its long term electric vehicle outlook that the pandemic has brought 10 successive years of growth in EV sales to a halt. Yet, on a more optimistic note, looking toward a greener future, BNEF said that internal combustion engines, or ICE, are set to drop by around 23%, while long-term electrification of transport is projected to accelerate in the years ahead.

The research showed that EVs will account for 58% of new passenger car sales globally by 2040, and 31% of the whole car fleet. It will also make up 67% of all municipal buses on the road by that year, plus 47% of two-wheelers and 24% of light commercial vehicles.

The forecasts have major implications for oil and electricity markets. Transport electrification, particularly in the form of two-wheelers, is already taking out almost 1 million barrels of oil demand per day and by 2040, will remove 17.6 million barrels per day, BNEF's analysis showed. EVs of all types are seen adding 5.2% to global electricity demand by 2040, the research report showed.

Colin McKerracher, head of advanced transport for BNEF, said: "The COVID-19 pandemic is set to cause a major downturn in global auto sales in 2020. It is raising difficult questions about automakers' priorities and their ability to fund the transition. The long-term trajectory has not changed, but the market will be bumpy for the next three years."

2020 outlook

S&P Global Platts Analytics forecasts 2020 EV sales to weigh in at 1.97 million units, down 11.2% on the year. By 2040, it expects 46.7 million EVs on the world's roads. Even prior to the pandemic, Platts Analytics expected EV sales in 2020 to decline slightly year-on-year, almost entirely on account of a broader slowdown in China.

However, EV sales more than doubled their market share year on year across Europe in the first-quarter to 6.8%, or 167,132 cars, against the backdrop of an overall decline in registrations, the European Automobile Manufacturers Association, or ACEA, said recently.

BNEF's analysis suggests that global sales of internal combustion engine, or ICE, cars peaked in 2017 and will continue their long-term decline after a temporary post-crisis recovery.

UK new car registrations fell 97.3% year on year in April to 4,321 units, the Society of Motor Manufacturers and Traders data showed. SMMT expected 1.68 million new car registrations for full year 2020, the lowest since 1992.

Given the highly distorted sales, UK EVs accounted for 31.8% of the market, up from 0.9% a year ago.

During BNEF's Summit Munich 2020, a live streamed event aired Tuesday, Harald Hendrikse, auto research analyst at Morgan Stanley, said that he sees some recovery in the auto sector as various government stimulus measures kicks in, and pent up demand post lockdown is asserted, but fears for the sector's long term outlook.

Still, he believes that the auto sector will continue to invest in EVs as "strategically they are not going to cut the future." Instead, he expects a streamlining of legacy business units and a focus on that which is most profitable.

"Even with a fairly strong V-shaped sales recovery in 2021 (possibly buoyed by more first time car buyers seeking an alternative to public transportation, owing to virus concerns), Platts Analytics does not see global car sales returning to 2019 levels until 2022-2025," it said.

The main consensus across opinions is that the EV trend is here to stay.

Chris LaFemina, equity research analyst at Jefferies, told S&P Global Platts that the EV trend is "pretty clear, EVs will continue to take market share." He, like others, said that the autos are now too invested in the trend toward electrification, owing to intensifying environmental regulation alongside consumer demands.

He added that the projected pressure on EV sales is a function of the battered economy owing to the virus, rather than a consumer choice.

Charging infrastructure

Laurent Michel, general director of France's energy and climate, ministry for the ecological and inclusive transition, said that the successful deployment of charging infrastructure is essential for the rapid progress of EV adoption.

Aleksandra O'Donovan, head of electrified transport for BNEF, said: "We estimate that the world will need around 290 million charging points by 2040, including 12 million in public places, involving cumulative investment of $500 billion."

BNEF estimates that home, workplace and private commercial charging will account for 78% of this investment. Investment in public charging infrastructure is seen as a cumulative $111 billion across all countries by 2040. Most of this can be provided profitably by the private sector as utilization rates rise in the 2020s, but government support may be needed in some regions.

Currently, there are over 7 million passenger EVs on the road, together with more than 500,000 e-buses, almost 400,000 electric delivery vans and trucks, and 184 million electric mopeds, scooters and motorcycles on the road globally. The majority of the e-buses and electric two-wheelers on the road today are in China.

(S&P Global Platts)

• [Editor:王可]