The EV Revolution – Part 1

EV sector is at the start of a secular growth phase, and it will be a key driver of global economy. Ever since the first industrial revolution in 18th century, there have been a number of major technical innovations that became the core driver of global economy for 30-60 years. (See details at – The Sixth Wave – What will drive markets for next 50 years?).

The development of information systems, internet, and telecom were all interconnected and were the core driver for previous 30-35 years. It was a digital revolution that enabled the processing and storage of vast amounts of data, revolutionized communication and information sharing, and the development of sophisticated data analytics.

This technology group tremendously increased productivity of existing industries and spawned several new industries related to computing devices, software programming, and e-commerce.

The internet ushered in a new frontier of globalization, a borderless landscape of digital information flows.

What will be the core drivers now?

During the third technological wave (1900 – 1950), IC engine was one of the core drivers, and now we have electric vehicles (EVs) taking place of that. Digital revolution is now enabling EV revolution. There are multiple reasons that indicate EV technology to remain in a secular growth phase. The key reasons are –

  • There is a burning global need to control emissions
  • EV technology has already proven itself to be a viable alternative
  • All manufacturing inputs are available, and more resources are being found
  • Economies of scale and technological advancements will improve affordability

For any technology be a major driver of growth, it must fulfil certain conditions. It should be –

  • Able to address a global burning need,
  • Sustainable,
  • Scalable,
  • Commercially viable

EV technology checks all these points.

EV revolution snapshot

The global market for electric vehicles (EVs) has expanded dramatically over the past decade, a trend which will only continue through 2050 with government and consumer spending on EVs increasing. Decarbonization of the transport industry is the key driving force.

Global EV sales

In 2011, around 55,000 electric vehicles (EVs) were sold around the world. 10 years later in 2021, that figure had grown close to 7 million vehicles.

With rising global electrification, the global EV market has seen exponential growth over the last decade. Using data from the International Energy Agency (IEA), this infographic shows the explosion in global EV sales since 2011.

The Start of EV revolution

From 2011 to 2015, global EV sales grew at an unprecedented average annual rate of 89%, with roughly one-third of global sales occurring in the U.S. alone.

Start of EV revolution

EV Sales by Country (2021)

After remaining fairly flat in 2019, global EV sales grew by 38% in 2020, and then more than doubled in 2021. China was the driver of the growth—it sold more EVs in 2021 than the rest of the world combined in 2020.

EV sales by country

China has nearly 300 EV models, more than any other country, and it’s also home to four of the world’s 10 largest battery manufacturers. Moreover, the median price of electric cars in China is just 10% more than conventional cars, compared to 45-50% on average in other major markets.

Germany, Europe’s biggest auto market, sold nearly 700,000 EVs in 2021, up 72% from 2020. The country hosts some of the biggest EV factories in Europe, with Tesla, Volkswagen, and Chinese battery giant CATL either planning or operating ‘gigafactories’ there. Overall, sales in Europe increased by 65% in 2021.

The U.S. also made a comeback after a two-year drop, with EV sales more than doubling in 2021. The growth was supported by a 24% increase in EV model availability, and also by an increase in production of Tesla models, which accounted for half of U.S. EV sales.

Tesla’s Leadership in the U.S.

Tesla is the world’s most renowned electric car company and its dominance in the U.S. is unmatched.

Between 2011 and 2019, Tesla accounted for 40% of all EVs sold in the United States. Furthermore, Tesla cars have been the top-selling EV models in the U.S. in every year since 2015.

TESLA

*Estimates

Share of total sales calculated using total U.S. EV sales of 631,152 units, based on data from the IEA.

Source: Cleantechnica

Tesla accounted for over 50% of EV sales in the U.S. in 2021 with the Model Y—launched in 2019—taking the top spot. Furthermore, the Model Y remained the bestselling EV in the first quarter of 2022, with Tesla taking up a massive 75% of the EV market share.

Despite Tesla’s popularity, it could face a challenge as other automakers roll out new models and expand EV production. For example, General Motors aims to make 20 EV models available by 2025, and Ford expects to produce at least 2 million EVs annually by 2026. This increase in competition from incumbents and new entrants could eat away at Tesla’s market share in the coming years.

EV revolution is on – current figures point to fast global growth

Statistics maintained by South Korea-based SNE Research show 43 percent year-on-year growth in global EV registrations in the first five months of 2023.

The research firm says from January to May of this year, global EV registrations of nearly 4.85 million units represent 43 percent year-on-year growth. And in the first five months of this year, global EV battery usage has posted 52.3 percent growth.

Much of the growth is driven by the increase in the Chinese domestic market for EVs. However, the shift to EVs—which eventually will impact what auto dismantlers and auto shredder operators see flowing into their facilities—is not occurring in China alone.

China’s 57.8 percent 2023 EV market share is a world leader, but EV sales in Europe are up 23.7 percent thus far in 2023, and in North America they have risen by 51.7 percent year on year.

In North America, EV battery production and battery recycling capacity are being added regularly in anticipation that the current 12.6 percent growth trend is likely to continue or gain momentum.

What are the best investment opportunities?

There are lesser known global companies that have been working diligently to build their competitive advantage, few of them are now ready to win this long-term rally. Visit Trikaal Resources page to explore the best opportunities – not just in EV, but in other exciting sectors as well.

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