The global share of electric cars in new deliveries surpassed expectations in 2021. Governments and corporates also made regulatory and strategic progress.
Keeping up production remains a challenge and high raw material prices cloud the outlook. But the share of electric cars is expected to increase in 2022 and strong orders signal more progress in 2023.
Global uptake of EVs beats expectations
The global uptake of electric vehicles (EVs) (battery electric vehicles BEV + plug-in hybrid electric vehicles PHEV) is ahead of earlier expectations. The global share in new registrations hit 9% in 2021 (6.6 million) against earlier expectations of 6% (BNEF). The global figure was supported by an acceleration in Europe (with a 19% share) and China (14% share). The US lags in the electrification of new cars (total EV share was just 4.5% in 2021), but times are changing here. Ford – for instance – received 200,000 reservations for the new all-electric F150 light truck in a few months' time. With production kicking off, this will add to the EV share.
Largest European car markets gear up, lifting the continent
Looking at the breakdown of the EV share in Europe's new registrations over 2021, both fully electric vehicles (10%) and plug-in hybrids (9%) continued to rise, helped by new models entering the market. Within Europe, the largest car markets of Germany (14%), the UK (12%) and France (10%) have seen double-digit growth in BEV sales. A doubling of the fully electric share in Germany, the largest European car market, has pushed up the European average. A large car market which is still notably behind is Italy, at just 5% in 2021.
Production constraints limit potential in 2022
The total production of new cars has been significantly hampered by semiconductor shortages over the past year. These shortages are not over yet and several European production sites including those of VW and BMW have faced new hiccups in supply chains due to interruptions at Ukrainian wire harnasses suppliers. Delays from lockdowns in China might trickle down as well later on this year. This means underproduction will remain throughout this year.
EVs require more chips but car makers also prioritise production
Full electric vehicles, which have more complex digital designs, require some 2,000 chips on average, roughly double the amount needed for conventional cars. Mature chips, which are still used in electric cars, have been in short supply as most of the capacity expansion has been focused on high-end chips. These supply issues have led car manufacturers to prioritise the types of cars they produce. But manufacturers are still trying to increase production of chip-consuming EVs (including E-SUVs) in order to keep up with competitors in the green transition and to comply with European CO2-reduction targets in average production.