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Global Electric Vehicle Sales to Rise by 36% in 2021

Despite the downturn from the coronavirus pandemic and lockdown orders, electric vehicles are expected to see surges in sales soon.
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Despite the downturn from the coronavirus pandemic and lockdown orders, electric vehicles are expected to see surges in sales soon.

The forecast was shared in a report from CNBC last weekend. Citing estimates from EV and battery research firm Cairn Energy Research Advisors, the news source predicted that electric vehicle sales should spike significantly in 2021.

Europe and China are the New Frontiers

As CNBC’s report explained, several countries have been investing in initiatives to get their citizens to purchase electric vehicles going forward. This should provide more of an incentive for customers to respond positively, and subsequently, a massive payday for companies invested in the next evolution of vehicles.

In general, Cairn estimates that electric vehicle sales across the world will jump by 36 percent in 2021. Such a move will see the metric cross the 3 million threshold mark for the first time.

Sam Jaffe, the Managing Director of Cairn Energy Research Advisors, explained that countries have already shown a pent-up demand for EVs. This, as well as a combination of other significant factors, should bring about a big year for the industry when 2021 rolls by. 

He specifically pointed to the growth in appetite for EVs across China and Europe. The former is the world’s largest automobile market, and it has been showing a significant pivot towards electric cars.

Other countries should follow soon enough, and EV companies will soon have a demand rush on their hands. Bernstein Research already estimates that electric vehicle production will reach 1.5 million this year.

However, Cairn Research believes that the most significant push will come from Europe. As the firm explained, most European governments have made commitments to lower their carbon emissions, with the Paris Agreement and other environmental treaties already putting some of them in check. These commitments are causing countries to push for electric vehicles as a stable alternative to what we have now.

“The European automakers and Tesla are all adding capacity and that will really have an impact starting next year,” Jaffe explained.

Tesla’s Oncoming Boom

The Silicon Valley company appears to be gearing up to spear-head this market surge as well. Electrek reported at the BloombergNEF Summit earlier this year that the firm already owns as much as 60 percent of the U.S. electric vehicle market. Tesla’s stake in the global EV market should be smaller, but it is still in a solid position. 

As Cairn explained, Europe and China will power EV growth from next year. Tesla already has a $2-billion gigafactory in China, from where it shipped 400,000 vehicles in 2019 and planned to ship another 500,000 this year – before the pandemic hit. With the gigafactory’s capacity, Tesla has placed itself in a prime position to see significant growth going forward.

The firm is also making a big play in Berlin, as it plans to open another gigafactory in the German capital. Company chief executive Elon Musk announced plans to build a factory in Berlin last year, and video footage from a few weeks ago showed that the company seemed to be done with site preparations.

Of course, Tesla’s growth in the United States should also come in steadily. Last week, the California New Car Dealers Association published reports of state-wide sales for the first quarter, and the Tesla Model 3 coming in first with 18,856 units sold. 

Cairn Research anticipates as much, as the company forecast that electric vehicle sales should also surge in the United States going into 2021. The company further predicts that the Tesla Model 3 and Model Y will see the most significant gains.  However, several other options – including the Hummer EV SUV from General Motors and Ford’s Mustang Mach-E – should see boosted sales.

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Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works. jimmy@moneycheck.com

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