Electric vehicles continue charge toward sales dominance – EY analysis

Source: press release, 5 January 2023

Randall Miller, EY Global Advanced Manufacturing & Mobility Leader
Randall Miller, EY Global Advanced Manufacturing & Mobility Leader (photo: EY)

Electric vehicle* (EV) sales in the US, China and Europe will outstrip all other engines 3 years sooner than previously expected, according to new EY research and analysis. The figures come from the EY Mobility Lens Forecaster, an artificial intelligence (AI) powered forecasting tool that provides an outlook for light vehicle registrations through to 2050.

The latest predictions show that by 2027 EV sales in Europe will surpass those of other powertrains, a trend that will be repeated in both China and the US by 2032. For Europe and China this is one year faster than previously expected and for the US four years faster, driven by continued investments in electrification, leading states are California, New York, Washington, and Massachusetts among others. The analysis also shows that by 2040, internal combustion engine (ICE) vehicle sales will shrink to less than 1% of global sales 5 years faster than previously expected.

Randall Miller, EY Global Advanced Manufacturing & Mobility Leader, says, “Despite a series of finance and energy related headwinds in the last twelve months, the EV revolution continues to gain momentum and the point at which we think EVs will come to dominate the marketplace has actually moved forward.”

“In Europe, car sales in general are down and we would expect the move over to EVs to potentially struggle if the energy crisis persists. This would require more government assistance to maintain the current pace. In China, while we expect EV to dominate sales by 2032, we also see hybrids sustaining their market share all the way up to 2050. In the US we see large population states leading the way, so there remains cause for optimism in meeting the 2030 target for 50% of sales being EVs. Despite this the US will need to deal with supply chain issues and recessionary headwinds focusing on charging infrastructure and in-country battery development to really push on with EVs,” Miller adds.

EV sales charge continues
Rising consumer demand backed by government policies and incentives, along with aggressive electrification targets by OEMs have accelerated the transition to EV adoption in all the three key regions – Europe, US & China. Benefits of a carbon-neutral mobility ecosystem are now being realised at a larger scale which has led to substantial investments in all the three regions towards setting up EV infrastructure and transitioning from fossil-led mobility ecosystem to an electric one.

A better way to forecast
EY automotive analysts and data scientists built the EY Mobility Lens Forecaster on a neural network model that uses AI to analyse several variables that influence demand and supply for mobility. These include variables that reflect consumer behaviour, regulatory trends, technology evolution (vehicle and ecosystem) and manufacturers’ announced strategies. The model is updated regularly with new market inputs to keep up with the ever-changing reality, including disruptions and available technology. As its predictions are matched up against actual outcomes, the model adjusts its calculations and learns from any mistakes for future predictions, essentially becoming smarter and more accurate over time.

*Battery electric vehicles and plug-in hybrid vehicles.