The worldwide electric vehicle (EV) sales in June grew to 587,308 units, up by 140% year-on-year (YoY) and by 29% month-on-month (MoM), according to the Worldwide Monthly BEV & PHEV Tracker from Researcher and Research. The industry also set a new monthly sales record this year.

In terms of sales by country, as shown in Table 1, China remained the world’s largest EV sales country, with 240,494 units sold and a 41% share of sales, down 2% compared to May. In fact, China’s share was 48% in April, but it fell for the second month in a row as sales in other countries grew more.

Germany and the United States remained the second and third largest sales countries, both of which accounting for 11% of sales in June, with 65,987 units and 65,593 units, respectively. Germany’s global share fell by 1%. It is worth noting that the proportion of the U.S. market remained unchanged, but the market size was already comparable to that of Germany. Such growth is rare in the absence of large-scale subsidies and supporting measures in the U.S. market.

The fourth and fifth largest markets were still France and the UK, with 38,256 and 34,056 units sold, respectively; with both up 1% in June. The next countries were Norway and Sweden, both ahead of Italy in the rankings. Sweden’s sales surged to 18,035 units in June (less than 100 units away from Norway’s 18,088 units) due to the new policy, with its MoM growth being the highest among the top 10 EV sales countries at 86%. On the other hand, because of the pre-peak season demand for commercial car purchases, Italy saw the highest YoY growth rate of 281% in the top 10 EV sales countries, with 15,206 units sold and a 1% increase in share.

Another bright spot is South Korea, where policy support has allowed the EV market to grow significantly to 14,624 units. The country’s sales in a single month were close to that of Italy by less than 1,000 units.

Finally, the Netherlands returned to the top 10 with 8,751 units, replacing Spain’s 7,245 units to be ranked the tenth.

Our estimate for the global EV sales volume in the second quarter is 1,462,782 units, with a YoY growth of 180% and QoQ growth of 25%. For the forecast for the second half of the year, we think there are several points to observe.

First of all, we believe that demand for new cars is now significantly stronger than supply. However, due to lack of automotive chips which led to limited supply, the new car market in July could not be as stronger as prior expected. From this point of view, although EV sales have been the focus of all automakers, the supply side of the industry will still affect the achievement of EV sales targets in early Q3. With this in mind, we expect the global EV market to decline in July, but significant growth will be expected in September.

Secondly, since China accounts for a very high proportion of the global EV market, the demand in China will directly affect the performance of the global EV market. As China’s EV market has long relied on government subsidy policy and local incentives, once the policy is changed, it will directly impact the market. However, under the thinking of planned economy, the Chinese government should be inclined to continue the subsidy policy so that goal achievement will not be too low. For example, the Ministry of Industry and Information Technology planned in 2019 to increase the proportion of electric passenger car to 25% in 2025. Therefore, the dynamic adjustment of the actual subsidy amount will not be very large.

Moreover, whether the global impact of COVID-19 will continue is also a major variable. No one knows what will happen in the second half of the year, due to the continuous emergence of variant viruses, multiple waves of epidemic occurred in various countries. Fortunately, vaccinations have been underway in major countries, so the EV market has at least survived the worst of it this year.

The last point is about the development of the U.S. EV market. As we saw in June, the scale of the U.S. market was close to that of Germany, and with only 3% EV penetration in the US, the potential for future growth is extremely high. The U.S. infrastructure is still inadequate, and President Joseph Biden’s EV-related policies are just revealed that half of new vehicles must be zero emission by 2030. Therefore, in the long term, demand for EV in the U.S. is expected to have a significant growth.

Considering various scenarios, our current estimates for Q3 and Q4 are 1,821,362 units and 1,930,904 units, respectively, with YoY growth rates of 108% and 39%, and QoQ growth rates of 25% and 6%, respectively, resulting in a 2021 estimate of 6,389,035 units and a YoY growth rate of 97%. Overall, we think EV sales this year will be better than the consensus.

By: DocMemory
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