Global sales of battery electric vehicles will increase fourfold over the next decade – from roughly 10% of new auto sales in 2022 to 40% by 2030, according to Morningstar Equity Research.
In 2022, there were just under 8 million EVs sold globally, up from 0.5 million vehicles in 2016, and 2030 is likely to see 40 million EVs sold, the report writers said.
“While EV sales have grown rapidly over the past several years, we think the transition is still in its early innings … The transition to EVs from internal combustion engines will transform multiple industries throughout the auto supply chain, from raw materials to EV charging,” the Thematic White Index Paper said.
The 30-page briefing, Morningstar Global Electric & Autonomous Vehicles Select Index, also identified geographical differences.
“While we see growing EV volumes globally, adoption rates will differ significantly by country. We forecast China, the global leader in EV sales, will continue to lead over the next decade. Europe will remain second. The US, which currently lags the global adoption rate, will catch up to the global rate by 2030.
Also, the report authors also identified sustainability-linked subsidies and incentive schemes as key market movers.
“EV sales have grown rapidly over the past two years, but we see a modest slowdown in 2023 versus 2022 due to the phase-out of a federal subsidy in China and reduced subsidies in Europe, partially offset by the introduction of a federal subsidy in the US. Currently, subsidies have a large impact on EV adoption trends. However, organic demand stemming from cost and functional parity with internal combustion engine vehicles will drive rapid adoption in the second half of the 2020s and beyond.”
On the topic of autonomous driving and advanced driver assistance systems (ADAS), the report forecasted that automotive industry suppliers’ total addressable market will grow by a 22% CAGR from 2015 through 2040.