Weekend DD – EV Market and Analysis

Electric Vehicles | Findings, and Discussion

Recognizing Industry Leaders Across Multiple Segments

The growth in electric vehicles (EV) and hybrid electric vehicles (HEV) is climbing; by 2025, EVs and HEVs will account for an estimated 30% of all vehicle sales.[1] The US EV market is expected to reach 6.9M unit sales by 2025.[2] By 2030, Deloitte forecasts China to achieve a domestic market share of around 48% – almost double that of the United States (27%), and Europe should achieve 42%; growth will be accelerated in countries offering incentives.[3]

Major Market Outlooks – to 2030

While the United States and China have been the two largest markets for EVs, European growth is speeding up. In Q1 2020, European EV sales rose as the overall EV penetration rate increased to 7.5 percent. So far, several countries are discussing additional purchase incentives as part of their economic stimulus programs.

penetration growth, Q1 2019 vs Q1 2020

This transition is accelerated by growth in per-capital income in developing countries. The automotive market in 2025 will see around 120m vehicles sold, with China comprising 35m of sales. Considering the penetration rate for Electric vehicles, we can expect +30m global EV sales, with China and Europe leading at +10.5m and +5m sales, respectively.

EV Segments as % of Auto Market

For both North America and Europe, hybrids and BEVs are set to lead over the next decade as plug-in hybrids are not proving too popular in either region. In Europe, plug-in electric vehicles (BEVs and PHEVs) will rise from roughly a 2% share of total new sales in 2017 to around 9% by 2025.

Moving forward, accurate results and revenue forecasts will be determined by these key questions:

1. How is the speed of competition compared to the speed of industry growth?

2. What is the efficacy of government incentives on consumers?

3. How are startups able to differentiate their products?

Segment Discussion

With these questions, now we examine the segmentation and distribution of the industry. Electric Vehicles have multiple avenues of growth opportunities; some recent developments include startups like Lordstown Motors, Workhorse Group, and Canoo.


Strong opportunities exist outside consumer vehicles, as the competitive landscape intensifies. Small startups that wish to combine EV and Autonomous Driving technology also try to find their niche in fleet vehicles focused on light-duty and delivery services.

Within consumer vehicles, BEVs and Hybrids are likely to take the lead, with long-term trends favoring BEVs. I believe Plug-In Hybrids in a very awkward position, having to compete against existing hybrid options and new battery vehicles. However, they are also viable in locations with poor charging infrastructure. Specifically, I think two questions will be critical in determining the future of Plug-In Hybrids. 1. How fast is charging infrastructure expanding in relation to EV sales? 2. What are the markets that have high incentives but poor charging infrastructure?

Market Remains Fragmented as of 2019

Conclusion and picks

Within consumer vehicles, luxury and basic vehicle models must also be distinguished. Thus, we distinguish key winners in their separate spaces.

Within Luxury EVs, NIO is set to be the clear winner with strong growth vs. peers, smart expansion in high-penetration markets, and effective subsidy schemes.

Within normal models, markets continue to remain fragmented as EV companies fail to break out of home markets. Winners likely come from established global brands, like Ford and GM.

In light-duty/transport space, clear leaders in the innovation-production pipeline include Lordstown motors and Renault-Nissan.

Safe defensive picks come from large Auto-conglomerates with expansive EV portfolios like BYD, BAIC, and Renault, having a portfolio of products across multiple segments.

Major Sources

JP Morgan, “Driving into 2025, The future of Electric vehicles” https://www.jpmorgan.com/insights/research/electric-vehicles

S&P Global, “US EV market sales to rise to 6.9 million units by 2025: Frost & Sullivan” https://www.spglobal.com/platts/en/market-insights/latest-news/electric-power/111920-us-ev-market-sales-to-rise-to-69-million-units-by-2025-frost-amp-sullivan

Deloitte, “Electric vehicles Setting a course for 2030” https://www2.deloitte.com/us/en/insights/focus/future-of-mobility/electric-vehicle-trends-2030.html

Goldman Sachs Market Research

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