Illustration of an electirc vehile plugged to a charging station with illustrations of covid-19 virus floating in the air around it

CoViD-19 slams brakes on electric vehicle sales globally; makers see it as mere ‘bump in the road’

Starting this week, TessDrive.com presents a global news summary of the latest developments in environment-friendly, sustainable transport and travel.

Since the CoViD-19 pandemic overtook the world, we knew it would only be a matter of time when industries around the world would begin to bear the inevitable negative impact—sales and opportunities lost. For the automotive industry, it’s not just the internal combustion engine (ICE)-powered vehicle that is affected. The virus behind the wheel has also slammed the brakes even on electric vehicle (EV) global sales.

We are looking at a disastrous 40% (or more) forecast drop towards the end of the year in global sales. According to an analysis made by an energy research company Wood Mackenzie last April, the anticipated drop would be mainly due to the ongoing economic fallout, no thanks to CoViD-19. For a particular vehicle technology breakthrough that has been touted to propel us to the future of mobility and replace ICE cars, this has been a complete setback.

Interestingly, Plug In America, an EV advocacy group, thinks otherwise. According to the group, the lengthy capital-investment timelines in infrastructure and vehicle production must also be considered. Further, the group believes that it’s enough reason to be confident that the EV market will survive. Now that remains to be seen.

Wood Mackenzie, meantime, is looking at around 1.3 million units to be sold globally this year. Compare that to the 2.2 million units sold in 2019, that’s clearly where the energy research company is coming from.

Even the world’s EV market leader has not been spared from diminishing sales brought about by the pandemic. China’s vehicle sales plummeted by 21% in January and a disappointing 80% in February—all compared to last year’s figures. As for EVs, it’s even worse as February sales were projected to have dropped by over 90%.

“Most new EV buyers are still first-time owners of the technology. The uncertainty and fear created by the outbreak have made consumers less inclined to adopt new technology,” said Ram Chandrasekaran, principal analyst for transportation and mobility at Wood Mackenzie. “Once the epidemic is contained in China, we suspect consumers will flock back to car dealers and reaffirm their confidence in EVs,” he added.

As for Europe and North America, bouncing back may take longer than expected, as these regions were several months behind China when the Covid-19 outbreak took place.

So, how about Tesla’s ambitious 2020 goal?

The Model Y compact crossover utility vehicle started deliveries of orders. Even Tesla CEO Elon Musk was confident that the Model 3 sedan platform-based model could outsell Model S, Model X, and Model 3 combined.

This year was supposed to be a great one for Tesla, considering its new factory in Shanghai, known as Gigafactory 3, produced excellent EV delivery numbers in the first quarter. But share price still dropped by 40% compared to the good figures in February. That despite production interferences, as well as the coronavirus outbreak.

Also, Tesla halted its production at its Fremont, California EV factory last month. So, this bought out doubts about the company’s ambitious target to hit 500,000 vehicle deliveries this year. Again, this would be another development to watch out for in the coming months.

“Unfortunately for EV adoption, this is likely to lead to a plateauing of sales in the near term. While the pent-up demand from the pandemic will help a bounce-back in sales later in the year, new demand growth will (not be apparent) until 2021,” Chandrasekaran explained.

Because car companies around the slowed down, if not ceased altogether, their EV production, this could only mean more pressure for these companies to achieve full electrification in the future.

Let us not even forget the effects of people working from home have now realized that they don’t also have to travel at all; hence, the need to buy a car has taken less urgency. On the flip side, others may opt to buy cars to avoid crowded public transport systems.

With EV sales struggling, this is where government incentives and regulations will play a vital role. To date, China and Europe are doing their respective roles in promoting EVs aggressively. But the United States, on the other hand, has seen doing less under the Trump administration. Since battery-powered cars are more expensive, it would take subsidies for more people to afford them, particularly in the time of CoViD-19.

Another effect on car buyers is the growing appreciation for a significant reduction of carbon footprint as an effect of city lockdowns around the globe. The cleaner air and clearer skies might influence future car buyers to consider EVs as the best alternative to sustain the positive outcomes of the pandemic to the environment.

Sources: newsdata.com, Green Tech Media.com, and The New York Times