About 560,000 electric vehicles (Battery Electric Vehicle and Plug-in Hybrid Electric Vehicle) were sold in Europe last year as the electric vehicle market grew by 45% compared to 2018. Sales in the fourth quarter (about 200,000) increased by 81% compared to that of the fourth quarter of 2018. Various support measures by EU such as regulation on emission gas and subsidy for electric vehicle had contributed to a huge jump in electric vehicle sales.
On the other hand, electric vehicle sales in the U.S. in 2019 saw a 9% (about 300,000) reduction compared to 2018 due to suspension of subsidies for few electric vehicles. China, which is the world’s biggest electric vehicle market, also experienced a downward trend for two years in a row due to reduction in subsidies. “Carrot-and-stick policy” is still seen as a very effective approach to expand the eco-friendly vehicle market.
◊Global countries and automotive manufacturers gradually distancing themselves from internal combustion engine
The global electric vehicle market is expected to grow at a fast rate this year with Europe at the center. EU has decided to reduce the amount of CO2 emission from a car by 37.5% until the end of 2030 according to the Paris Agreement 2018. As a result, allowed amount of CO2 emission from a car will be reduced from 130g/km to 95g/km in 2020 and eventually 62g/km and 10g/km in 2023 and 2050 respectively. If automotive manufacturers cannot meet this standard, they will have to pay a fine of 95 euros per car based on excess amount of CO2 emission and sales volume. Major European countries such as Germany, France, England, and Norway are currently maintaining or increasing the amount of subsidies for electric vehicles that they provide.
As a result, there is an increase in number of European automotive manufacturers that are declaring “free from internal combustion engine”. Volkswagen announced that it would stop developing a new internal combustion engine starting from 2026. Volvo announced that it would gradually stop manufacturing internal combustion engine-based cars starting from this year and that its new vehicles will be only electric vehicles. Toyota, which had been sticking to HEV, also made a shocking announcement that it would stop manufacturing internal combustion engine-based cars starting from 2025.
It seems that the speed of production of internal combustion engine-based cars coming to an end is becoming faster as a year goes by. Jaguar and Land Rover are also planning to implement at least one electric model to every one of their models starting from this year. PSA has also decided to change half of their models into electric vehicles by the end of this year while the alliance between Renault and Nissan are looking to sell 2 million electric vehicles annually within the next five years. Hyundai Motor Group is also planning to increase the number of its electric models to 29 by the end of 2025.
Regulations from countries are also bringing changes to the market. British Government made an announcement early this year that there would be absolutely no sales of cars with gasoline or diesel-based engines starting from 2035. Its plan pushes its initial plan forward by five years as it looks to reduce amount of CO2 emission.
French Government is preparing to stop sales of internal combustion engine-based cars by 2040. Norway’s assembly is looking to zero the amount of exhaust gas of cars in Norway by 2025 although it does not have binding power.
“Generalization of electric vehicle is an obvious procedure along with efforts from various countries in order to solve issues involving climate changes.” said Professor Choi Woong-cheol of Kookmin University’s Automotive Engineering Department. “Although our automotive industry could not make swift actions towards this trend, it will be able to compete against foreign industries as they continue to diversify its models and focus on its own platforms.”
◊Consumers to enjoy wider range of options on electric vehicles
It is expected that electric vehicles will be generalized starting with Europe where regulations on eco-friendly vehicles have become stricter this year. Expensive cost, inconvenient accessibility on charging infrastructure, and lack of options have been seen as major reasons why electric vehicles have yet to be generalized.
However, there will be more options starting from this year as electric vehicles that have mileages between 300km and 400km with single charge and cost less are set to be released this year.
According to a report recently published by an American consulting company called McKinsey & Company, about 400 BEVs will be launched worldwide between 2020 and 2025. The number of middle and full-size electric vehicles increased from 18 out of 39 models in 2017 to 35 out of 96 models in 2019.
As the number of new electric vehicle manufacturers increases on top of the current automotive manufacturers, the global electric vehicle market is gradually becoming like the current internal combustion engine-based vehicle market.
The report predicted that the year 2025 will be the starting point when electric vehicles will become generalized because there will be electric vehicles with longer mileages due to an improvement in energy density of batteries and customized electric vehicles according to a driver’s driving pattern and driving purpose and price will be more competitive due to increased demands.
On top of these reasons, electric vehicles that will be released in certain countries such as Europe this year will be in various sizes such as compact electric vehicles and mid/full size electric vehicles. Volkswagen and Renault will release electric vehicles that cost around $25,200 (30 million KRW). Hyundai Motor Company, Kia Motors, and GM will also release electric vehicles that also cost around $25,200 starting from next year.
South Korea’s electric vehicle market will also be filled with various electric vehicle models. Audi, Porsche, and Renault followed by PSA and BMW Group MINI will release 7 new electric vehicles this year. As foreign brands enter South Korea’s electric vehicle market that has been led by domestic brands, options have become more diverse for consumers.
Although there will not be any new domestic electric vehicle released this year, there will be about 20 electric vehicle models to choose from due to an addition of 7 new foreign electric vehicle models. If PHEV models are added on top of these 20 models, there will be close to 40 models for consumers to choose from when the number of options was less than 10 just two to three years ago.
“Although environmental regulations are the main factors that are leading the global electric vehicle market, there is a gradual increase in demands for electric vehicles that do not create exhaust gas smell.” said a representative for the industry. “Fact that Hyundai Motor Group has been focusing on electric vehicle since one to two years ago and that Toyota, which had been sticking to HEV, announced that it would stop manufacturing internal combustion engine-based cars indicate that electric vehicles are becoming generalized.”
Staff Reporter Park, Taejoon | email@example.com