[Asia Economy Reporter Changhwan Lee] The global electric vehicle (EV) market is expected to grow explosively again this year, with annual sales projected to reach 4 million units.
On the 7th, Hana Financial Investment announced that it has revised its 2021 global EV market forecast upward from 3.54 million units to 3.99 million units. The market penetration rate is expected to rise from the previous 4.3% to 4.8%.
This is due to the recent EV market growing faster than expected, mainly in Europe and China. Hana Financial Investment analyzed that last year’s global EV market closed at 3.06 million units, significantly exceeding the previous forecast of 2.68 million units, as sales surged in the fourth quarter, primarily in Europe and China.
In the first half of last year, sales volume decreased by 15% compared to the previous year, but in the second half, sales increased by an estimated 93%, supported by global demand recovery, pro-EV policies from various countries, and the launch of numerous EV models. This performance is considered quite strong compared to the global automobile market, which shrank by 17% due to the spread of COVID-19.
The market penetration rate of EVs surged from 2.4% in 2019 to 4.0% in 2020. In particular, the European EV market experienced rapid growth.
The European EV market grew by 178% and 230% year-on-year in the third and fourth quarters, respectively, and expanded by 142% for the entire year of 2020, raising the market penetration rate sharply by 7.8 percentage points (p) to 11.4%. This was attributed to automakers’ efforts to meet CO2 emission regulations, which were especially concentrated in the fourth quarter.
The Chinese EV market saw a growth rate of -44% in the first half, but thanks to a low base and the launch of numerous EV models, it turned to growth of 49% and 93% in the third and fourth quarters, respectively. For the full year 2020, it increased by 9%, with a market penetration rate of 5.7%.
This year is also expected to see steep growth. As automobile demand recovers in major countries, pro-environmental vehicle policies are maintained or strengthened, and many EV models with improved competitiveness (Ioniq 5/CV/JW, ID.4, Model Y/Model S/Semi, R1T/R1S, etc.) are being launched.
Although the growth rate of the European EV market is expected to decline somewhat to 25% due to the high base effect, the growth rates of the US and Chinese EV markets are expected to rise to 22% and 34%, respectively, based on market demand recovery and internal combustion engine vehicle regulations. The Korean EV market is also expected to grow by 114%, supported by the introduction of EV-exclusive models from Hyundai Motor and Kia.
Song Seonjae, a researcher at Hana Financial Investment, stated, "With the continuous strengthening of pro-environmental vehicle policies by governments worldwide, combined with market cycle effects and the launch of numerous new EV models, the global EV market is expected to grow at an average annual rate of 28% over the next five years."
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