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The road to a fully electric future

Sales of electric cars have been accelerating steadily for more than a decade, topping a record 3.2 million globally in 2020 even as the Covid-19 pandemic slowed overall sales of passenger cars.

Road illustration

Tax incentives, stricter fuel-economy standards, eco-conscious consumers and new, lower-priced models are expected to rev up sales even further this year — by as much as 70 per cent.

But what does this mean for the electric vehicle (EV) market and the businesses that power it?

Join us on an interactive road trip through the data to explore the countries that are leading the charge, the competitors catching up with Tesla, the winners and losers along the supply chain, and then finish off with an EV race around the planet!

Growth of the EV market

Queen EV
1906 Wood's Queen Victoria Electric Car
Tesla
Tesla Model X

The electric car made its first appearance in the late 1800s in the form of light battery-powered carriages. While they soon outsold more unwieldy vehicles powered by horses, steam and gasoline, their popularity didn’t last.

The advent of the internal-combustion engine (ICE) in the early 1900s made it cheaper to run a car on petrol, which was more widely available and powered vehicles for longer distances – pushing EVs off the road for decades

Queen EV
1906 Wood's Queen Victoria Electric Car
Tesla
Tesla Model X

Now, over a century later, that trend is on course to go into reverse.

In 2020, EVs accounted for more than 4 per cent of all new vehicle sales worldwide, almost double its market share a year earlier.

Electric vehicles market cap versus legacy automobiles (USD bn)

0.2 0.4 0.6 0.8 1.0 1.2 2019 2020 2021 Legacy Automobile Stocks* Electric Vehicle Stocks** 23 November 2020 The capitalization of EV stocks exceeds the combined market cap of traditional auto companies
*Traditional auto stocks = Toyota, VW, BMW, Daimler, GM, Stellantis, Ferrari, Honda, Hyundai, Ford, Suzuki, Maruti
**EV stocks = Tesla, NIO, Byd, Evergrande, NV, Xpeng, Nikola, Green Power, Arcimoto, Kandi, Workhorse
Sources: Bloomberg; Santander

Electric vehicles market cap versus legacy automobiles (USD bn)

0.2 0.4 0.6 0.8 1.0 1.2 2019 2020 2021 Legacy Automobile Stocks* Electric Vehicle Stocks** 23 November 2020 The capitalization of EV stocks exceeds the combined market cap of traditional auto companies
*Traditional auto stocks = Toyota, VW, BMW, Daimler, GM, Stellantis, Ferrari, Honda, Hyundai, Ford, Suzuki, Maruti
**EV stocks = Tesla, NIO, Byd, Evergrande, NV, Xpeng, Nikola, Green Power, Arcimoto, Kandi, Workhorse
Sources: Bloomberg; Santander

Global plug-in vehicle markets

2019 2020 China, 1337k Germany, 398k US, 328k France, 194k UK, 181k Other, 298k Norway, 108k Sweden, 96k Netherlands, 90k Italy, 61k South Korea, 52k Belgium, 48k Canada, 47k +43% growth
Source: EV Volumes

While the market cap for EVs has since pulled back slightly, it remains neck-and-neck with ICE vehicles.

The switch to EVs will continue at pace as governments introduce tough emissions policies and generous incentives to go electric. Global sales are forecast to grow by 29 per cent a year over the next decade, exceeding 31 million by 2030.

Global plug-in vehicle markets

2019 2020 China, 1337k Germany, 398k US, 328k France, 194k UK, 181k Norway, 108k Sweden, 96k Italy, 61k Netherlands, 90k Other, 298k South Korea, 52k Belgium, 48k Canada, 47k +43%
Source: EV Volumes

Countries and regions leading the charge

China is the world’s largest EV market by far, followed by Europe and the US. Together, they account for 94 per cent of global EV sales.

On a per capita basis, Norway takes the prize for sales. Last year, it became the first country in the world where electric car sales were higher than the combined sales of cars powered by petrol, diesel and hybrid engines.

But even in countries with comparatively lower EV sales, uptake is growing exponentially. In Spain, for example, EV registrations topped 20,000 in 2020, a 64 per cent jump on the year before.

China and Europe will continue to dominate the EV market, driven by tough regulations and generous incentives.

USA flag

The US was the third-largest market for plug-in electric passenger car sales in 2020 with 328,000 sales, up 4 per cent on 2019.

Spain flag

The Spanish government allocated €550m for buyers who replace cars that are more than 10 years old with an A or B energy-label vehicle, emitting less than 120g CO2/km, regardless of fuel type.

Norway flag

Norway leads the sale of EVs as a percentage of total sales.

South Korea flag

South Korea's LG Chem is the world’s biggest maker of lithium-ion batteries after expanding cell capacity.

Chile flag

Chile has the largest reserves of lithium.

China flag

Beijing has imposed a mandate on car manufacturers to ensure electric vehicles make up 40 per cent of their total sales by 2030.

Carmakers in the fast lane

In the race to go electric, Tesla has long held pole position — and not just for EVs. Its market cap soared beyond $800bn in January, putting its worth on a par with the world’s nine largest carmakers combined.

The US car pioneer will need to continue innovating to keep its lead as competitors vie for a bigger slice of the market.

Carmakers new and old are set to unveil dozens of new EVs this year, with 520 new models expected to hit the road by 2022.

Global plug-in electric vehicle market share in 2020, by main producer (%)

0
Tesla
0
VW Group
0
SAIC
0
Renault–Nissan–Mitsubishi Alliance
0
BMW Group
Source: Statista

Plugging in: The complex EV battery supply chain

Manufacturing an electric vehicle requires fewer mechanical parts than for a traditional car but involves many more electric and electronic components. With carmakers set to roll out more than 30 million EVs a year by 2030, demand for materials risks exceeding supply.

The biggest challenge facing carmakers lies in sourcing the raw materials that make up the thousands of cells in each EV battery, the most expensive part of an EV.

Scroll over the car battery to find out which materials will be most in demand as production ramps up.

Battery 3D model Your browser does not support the canvas tag.

Lithium The most important material in battery manufacturing. Global demand for lithium is expected to grow at an annual rate of 25.5 per cent a year until 2024. Falling prices in the last three years slowed investment in lithium mining, leading to supply shortage. Prices only started recovering this year as government incentives boosted demand. Lithium miners and researchers are looking to develop innovative ways to produce the material more efficiently.
lithium

Cobalt About 60 per cent of the world’s supply is in the Democratic Republic of Congo, which is notorious for dangerous and unregulated mining practices. China controls most of the exports.
cobalt

Nickel Global demand for nickel is expected to jump to some 665,000 tonnes globally by 2025. There is no shortage of the metal but only a few countries, such as China, have the capacity to refine it.
nickel

Graphite Used in the battery anodes of many EVs. Nearly two-thirds of natural graphite is mined in China.
graphite

Nanotechnology Can be applied to everything from batteries to body parts to paint coatings. Batteries made from nanotech materials are lighter, which helps to prolong their lifespan.
nanotechnology

Who has the power?

Asian manufacturers dominate the global EV battery market. South Korea’s LG Chem overtook China’s CATL and Japan’s Panasonic as the biggest maker after hiving off its EV battery business late last year.

Top 5 lithium-ion battery producers by capacity (GWh per year)

LG Chem 51 CATL 38 BYD 26 Panasonic 26 Tesla 22
Source: Benchmark Mineral Intelligence
EV battery
Close-up of EV car battery

Even so, China remains the biggest maker of lithium-ion batteries, the most common type of battery used to power EVs.

Europe is forecast to become the second largest producer as it boosts investment to meet demand from regional carmakers, which must expand their EV line-up to avoid emission penalties for new cars.

Lithium-ion battery capacity share*
(%)

EV Car
China 77% Europe 6% US 9% Asia ex China 8%
Asia ex China 3% Australasia 1% China 65% Europe 25% US 6%
*As of February 1, 2021
Source: S&P Global Market Intelligence

Taking over the road

With countries and manufacturers throughout the supply chain shifting to more sustainable transport, when can we expect EVs to take over the road? Consumers will only make the switch in large numbers when EVs become as affordable to run as petrol cars.

Battery prices have already fallen dramatically this decade, but they will need to drop to around $100/kWh for EVs to become as cost-competitive as ICE vehicles — a tipping point that’s expected to be reached in the middle of this decade.

Volume weighted average price of battery packs for electric vehicles
($ per kWh)*

0
2010
0
2011
0
2012
0
2013
0
2014
0
2015
0
2016
0
2017
0
2018
0
2019
0
2024
*Average prices weighted based on volume sold, the battery pack used in Tesla Model 3 range from 50 to 70 kWh
Source: BloombergNEF

Electric odyssey

EV ownership is set to receive a turbo boost this year as motorsport fans tune in to Extreme-E. The world’s first electric off-road racing series, which kicked off in April, features electric SUVs competing in extreme environments around the world to raise awareness of climate change and accelerate EV adoption.

Race locations, 2021: Remote areas damaged by human activity

  • Alula Location: Saudi Arabia
    Terrain: Desert

    1
    Globe
    April 3-4
    Photography
  • Lac Rose Location: Dakar, Senegal
    Terrain: Beach

    2
    Globe
    May 29-30
    Photography
  • Kangerlussaq Location: Greenland
    Terrain: Arctic

    3
    August 28-29
    Photography
  • ParáLocation: Santarém, Brazil
    Terrain: Rainforest

    4
    Globe
    October 23-24
    Photography
  • Tierra Del Fuego Location: Argentina
    Terrain: Glacier

    5
    Globe
    December 11-12
    Photography

The competition vehicle, designed to deal with the most hostile terrains, pushes the boundaries of EV range and power.

ACCIONA SAINZ XE Team car

Sainz XE Team car
Sainz XE Team car
Source: ACCIONA SAINZ XE Team

As motor enthusiasts follow the race, carmakers will be assessing how these high-tech cars perform and will apply what they learn to the next generation of EVs.

Into the future…

2020
EVs 50% of all car sales

This will take the electric car to places that the pioneers of battery-operated vehicles could never have dreamt of — and will further fuel demand for a clean form of transport whose time has finally come.

EV sales are forecast to grow by 29 per cent a year over the next decade, exceeding 31 million by 2030. By 2040, well over half of all passenger vehicles sold will be electric.