Led by Tesla, electric vehicle sales are predicted to surge in 2021
Jaffe believes the two biggest factors that will spark demand for electric vehicles are the markets in Europe and China.
This could be Elon Musk’s moment, or at least when his vision of mass use of electric cars finally takes hold.
A new report by Cairn Energy Research Advisors, a analysis firm focused on the battery and EV industries, predicts a surge in electric vehicle sales in 2021 as countries whole the world push new programs to encourage consumers to buy battery powered vehicles. Cairn guess global sales of EVs in 2021 will jump 36% and top over 3 million vehicles for the first time ever.
Jaffe believes the two biggest factors that will spark demand for electric vehicles are the markets in Europe and China. China is already the world’s best market for electric vehicles, with one million battery powered models built in that country last year according to Sanford C. Bernstein.
Production of electric vehicles is estimated to climb to at least 1.3 million and could reach 1.5 million depending on market conditions this year, according to Bernstein analyst Mark Newman. Wedbush analyst Dan Ives raised his price target for Tesla from $600 to $800 saying, “we continue to believe EV demand in China is starting to accelerate with Tesla competing with a number of private and international competitors for this market share.”
Meanwhile, Cairn Energy Research predicts the biggest growth in EV sales next year will happen in Europe, mainly because governments in the EU are committed to lowering carbon dioxide emissions. That commitment is pushing other countries like France to roll out new incentives to convince residents to buy electric cars. In announcing a new bonus for people to buy an electric car, France President Emmanuel Macron said he wanted France to become the top producer in Europe of clean vehicles.
Jaffe says there is a crest of electric vehicle production coming from Europe that will spur greater sales. “The European autocompanies and Tesla are all adding capacity and that will really have an impact starting next year,” said Jaffe. Tesla’s next final assembly plant outside of Berlin is scheduled to begin production of the Model Y by the middle of next year.
This is not the first time a research firm has predicted a dramatic increase in EV sales and in recent years many of those predictions have been far too optimistic about the public’s willingness to go from a gasoline or diesel powered vehicle to a plug-in model. In October of 2018, J.P. Morgan estimated electric vehicles will account for roughly 4% of all vehicles sold in the world in 2020. Depending on what happens the rest of this year, EV sales will likely make up closer to 3% of total auto sales.
Jaffe also points out slowing economies around the world could short circuit demand for electric cars. “Consumer confidence is the key. If people are not confident about their jobs or economy, they will think twice before buying a new car,′ he said.