Deloitte has adjusted its market forecasting for the rapid growth of the global electric vehicle (EV) market by an additional 10 million to reach 31.1 million by 2030.
In spite of Covid-19 disruption total EV sales are still expected to reach 2.5 million worldwide in 2020.
Based on a compound annual growth rate of 29%, Deloitte’s research estimates this to top 11.2 million in 2025 and 31.1 million by 2030.
At this milestone, fully electric vehicles will account for 81% of all new EVs sold according to the research, outperforming their plug-in hybrid peers.
Deloitte’s outlook is based on analysis of industry data sets as well as public announcements made by original equipment manufacturers (OEMs). The revised figures are updated from original analysis conducted in 2018.
Deloitte identified a key factor in driving EV growth over the next 10 years as changing consumer sentiment, as many barriers to adoption gradually dissipate.
Jamie Hamilton, head of electric vehicles at Deloitte, said: “The price premium attached to many EVs restricted some early adopters but, as the cost of EVs have converged with petrol and diesel equivalents, the pool of prospective buyers is set to increase.
“A wider range of new EVs, combined with a growing secondhand market, means EVs are becoming a more viable option for many.
“However, overcoming consumer concerns around driving range and perceived lack of charging infrastructure will be important factors as more drivers consider the practicalities of switching to electric.”
Additional factors driving growth include a favourable regulatory environment, be it financial incentives or emissions targets, and the development of new EV models that span both affordable and luxury ends of the market.
Similarly, as company cars and fleet continue to represent the majority of all new car sales, a shift to EVs at a corporate level will further the global transition to electric.
Lockdown measures in response to the outbreak of Covid-19 saw major disruption to international supply chains and the temporary closure of dealerships.
Hamilton said: “While overall car sales plummeted during this time, EVs have shown resilience in some regions compared to the rest of the market.
“Consequently, the outbreak of Covid-19 means we have likely seen petrol and diesel vehicles reach their sales peak, albeit relatively unnoticed.
“With total annual car sales unlikely to return to pre-pandemic levels until 2024, even if sales growth in the petrol and diesel market returns, it is likely to experience a decline in market share thereafter.”
Deloitte’s analysis of 1,496 drivers found that 50% would consider an EV as their next vehicle purchase.
However, 33% indicate that a lack of charging infrastructure remains the greatest concern when considering the switch to full electric.
Hamilton said: “Continued investment in charging facilities and overcoming consumer concerns around their availability and accessibility could see the UK surpass the 32% global EV market share by 2030, reaching as much as 65% of the domestic market in the same period.”
A coalition of fleets running more than 400,000 cars and vans in the UK has already called on Government to bring forward the ban on new diesel and petrol vehicles to 2030.
The appetite for electrification is increasing among fleets, with leasing companies reporting record levels of demand from company car drivers.
The move away from internal combustion engine (ICE) vehicles has been driven, in part, by new benefit-in-kind (BIK) tax rates.
Company car drivers will pay no tax on a pure electric vehicle (EV) this tax year, while drivers of plug-in hybrid vehicles (PHEVs) are also enjoying much more favourable rates.