Tracking the Resounding Demand for Electric Vehicles

Over the years, while the demand for Electric Vehicles (EVs) has grown steadily, with people becoming more aware and concerned about climate change and the impact of fuel-driven vehicles on the environment.  

In this blog, we explore factors that have contributed to the rising demand for EVs in the last few years, and deep dive into what the future looks like for these sustainability-driven vehicles. 

What led to the spike in demand for EVs post COVID-19? 

From 2010 to 2019, EVs had marked a steady growth of 9% year-on-year, with the number of EVs on roads increasing from 17,000 in 2010, to 7.2 million in 2019. However, in 2020, when the pandemic hit, while overall new car registrations dropped by about one-third in the first half, share of EVs rose 70%. This massive jump can be attributed to several factors; 

The pandemic created a heightened awareness of the impact of fuel-driven cars on the environment, prompting 78% of potential EV buyers to shift their preference. In other words, more people started prioritising eco-friendly transportation options. 

The widespread adoption of remote work, a byproduct of the pandemic, reshaped commuting habits and, consequently, steered consumers toward more sustainable modes of transportation. This shift underscored a growing inclination toward environmentally conscious choices in the aftermath of altered work dynamics. 

Governments worldwide responded to the economic challenges posed by the pandemic by offering or extending fiscal incentives for electric car purchases. For example the European Union encouraged sale of EVs by enforcing stringent fuel economy and CO2 standards.  

Certain regions, including China and California also set mandatory target for EV sales. Additionally, the Governments took the initiative to support sales by making direct investments in publicly accessible chargers, and providing incentives for home charging point installations.  

A Merit expert adds, “These measures not only helped stabilise the decline in traditional car markets but also prompted more people to choose electric vehicles, aligning economic recovery with sustainable mobility goals.” 

Various countries have been witnessing the growing traction of electric cars as increasingly competitive options when considering the total cost of ownership. For instance, when we say total cost of ownership, we know that it includes the cost of purchase, operation and maintenance of the purchased asset during its lifetime.  

While it may seem like an electric vehicle costs more than an internal combustion engine (ICE) vehicle, EVs have lower operating and maintenance costs, which can make it cost effective in the long run. Let’s say we compare the Volkswagen ID.3 to the Volkswagen Golf. The former costs 16% more than the latter. It’s the same with Kia’s E-Niro and Niro Hybrid 2. The E-Niro will set a buyer back by just over 20%, but in the long run, the expenses for EVs will be much lower than for ICE vehicles.  

In fact, to help potential buyers understand this, the International Energy Agency (IEA) has developed an interactive calculator that buyers can use to compare the cost of owning an EV vs owning fossil fuel-dependent vehicles, and its impact on the environment and economy. 

One can say that this particular trend signifies a significant turning point where the economic advantages of electric vehicles are becoming more pronounced, contributing to their growing appeal among consumers. 

What the future holds for EVs 

A report by the International Energy Agency (IEA) shows that the global electric car stock touched 10 million in 2020, with Battery Electric Vehicles (BEVs) accounting for two-thirds of the new EV registrations. Further studies predict that by end of 2023, sales of EVs will increase by 32.04%, compared to the 10.3 million cars sold in 2022, with China leading with 8mn EV sales, followed by Europe with 3.1 million, and the United States with 1.8 million.  

It’s safe to say that the demand for EVs will only increase in the coming years with significant developments on the anvil in terms of technology, infrastructure and policies.  

Key developments we can expect are; 

• Batteries advancing for greater range and longevity: The anticipated improvements in battery technology will extend the range of electric vehicles (EVs) and reduce charging times. 
• Affordable pricing on the horizon: As economies of scale are realised and battery production costs decrease, the price of electric vehicle will likely become more competitive with traditional internal combustion engine (ICE) vehicles. 

• Charging infrastructure getting a boost: Governments and private companies will more actively invest in charging infrastructure to enhance the convenience and accessibility of EV charging. 
• Rising popularity: To align with the International Energy Agency’s Sustainable Development Scenario, an estimated 230 million EVs must populate global roads by 2030. The IEA underscores the 2020s as the pivotal decade for the mass adoption of electric light-duty vehicles to unlock their full potential in combating climate change. 
• Design innovation taking center stage: Electric vehicles offer greater design flexibility than their internal combustion engine counterparts. This will pave the way for new and creative vehicle designs. 
• Autonomous driving on the horizon: Electric vehicles will prove well-suited for the integration of autonomous driving technology, potentially revolutionising the future of transportation. 

Key Takeaways 

• Acceleration of EV Demand Post-COVID-19: The COVID-19 pandemic acted as a catalyst, significantly boosting awareness and concern about climate change, driving a remarkable surge in demand for electric vehicles (EVs). 
• Factors Driving Post-Pandemic EV Surge: The spike in EV demand post-COVID-19 can be attributed to heightened environmental awareness, the shift to remote work reshaping commuting habits, and global government initiatives providing fiscal incentives and support for EV adoption. 
• Economic Advantages Driving Adoption: Governments worldwide responding to economic challenges by offering incentives has not only stabilized traditional car markets but also prompted a shift towards EVs. The total cost of ownership analysis, considering purchase, operation, and maintenance, reveals the economic advantages of EVs over internal combustion engine (ICE) vehicles. 
• Anticipated Future Developments: Future trends include advancements in battery technology for extended range and reduced charging times, decreasing EV prices due to economies of scale, increased investments in charging infrastructure, and the pivotal role of the 2020s as the decade for mass EV adoption to combat climate change. 
• Innovation and Autonomy: Electric vehicles, offering design flexibility, are poised for innovative and creative designs. Additionally, the integration of autonomous driving technology is anticipated to revolutionize the future of transportation, highlighting the dynamic and promising landscape of the EV market.

Merit’s Expertise in Data Aggregation & Harvesting for the Global Automotive Sector 

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• Crafting end-to-end data pipelines and scalable data warehouses 
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• Extracting retail product attributes and audience data 
• Aggregating industry-specific data points for informed decision-making 

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