ICE Sales Peaked in 2017, EV Market Continues to Grow

It's doubtful that worldwide sales of internal combustion cars will ever reach their pre-pandemic levels, according to recent statistics provided by BloombergNEF (BNEF). According to data, the market for internal combustion cars, which includes conventional hybrids, reached its highest point in 2017 with 86 million passenger vehicles sold. However, with just 69 million vehicles in 2022, combustion vehicle sales were down nearly 20% from their high. In contrast, the number of plug-in cars increased to 10.4 million, up from little over 1 million in 2017.
With BNEF forecasting that plug-in models will account for almost a third of all passenger vehicles sold in China this year, the sales of combustion vehicles are projected to continue to decrease. Internal combustion car sales in Europe have also decreased dramatically since their high, while electric vehicle (EV) sales in the United States are poised for a breakthrough year thanks to the Inflation Reduction Act.

While there is a significant difference in the adoption of EVs between developed and developing nations, it is difficult to see where sales of combustion vehicles will increase, even in areas like Southeast Asia where the auto market is expanding. With EVs anticipated to account for a large portion of the market increase, countries in Southeast Asia are competing to become centres for battery and EV manufacturing.

During the next three years, BNEF anticipates that the worldwide fleet of combustion vehicles will stay mostly stable. But, as the EV fleet grows, this trend is expected to reverse itself starting in 2026. There will be no chance of turning back after the fleet has turned, which will have a big impact on the amount of oil used and greenhouse gas emissions. According to BNEF’s calculations, 2027 will mark the peak for global oil consumption from the transportation sector.

The market for commercial vehicles is also being impacted by the move away from combustion-powered cars. In China, electric vehicles accounted for 7% of total commercial vehicle sales last year, with heavy truck sales crossing the 5% EV mark in December.

While it may be alluring to believe that developing nations may be able to somewhat counterbalance what is occurring in China, Europe, and North America, it is anticipated that combustion car sales will continue to drop and that the switch to electric vehicles will take some time. Nonetheless, the pattern is obvious, and it appears that the automobile sector will become more electric in the future.

Source: Bloomberg

Bar graph showing the amount of vehicles sold from 2015 to 2022 per fuel type
ICE Sales Peaked in 2017 Electric Vehicle Market Continues to Grow
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