Automobile Research Institute, Market Outlook for Next Year
Despite concerns about the electric vehicle (EV) chasm (temporary demand stagnation), it is projected that global sales of electrified vehicles will exceed 20 million units next year. Although growth may slow somewhat, the widespread adoption of low-cost models in developed countries and strengthened environmental regulations in Europe are expected to increase EV penetration.
Jang Jaeryong, head of the Mobility Market Research Team at HMG Management Research Institute, said at the ‘Jasan-eobo’ event held at COEX on the 16th, "With price stabilization and interest rate cuts, purchasing conditions are expected to improve toward the second half of next year, leading to a slight expansion in new car sales growth." Jasan-eobo means ‘embracing and encompassing the automobile industry’ and is a monthly gathering organized by the Korea Automotive Technology Institute for industry professionals to exchange ideas.
HMG Management Research Institute forecasted global new car sales next year at around 85.84 million units. Considering this year’s annual sales of approximately 84.05 million units, this represents an increase of about 2.1%. However, it is expected to be difficult to fully recover to pre-COVID-19 pandemic levels (86.48 million units in 2019) next year.
Electric vehicle manufacturer Boya's production line in Wuhan, Hubei Province, China. Photo by Yonhap News
EV sales are expected to continue increasing next year, although the growth rate will slow compared to the past. The forecast for next year’s battery electric vehicle (BEV) sales is 12.2 million units, and plug-in hybrid electric vehicles (PHEVs) are expected to reach 7.88 million units, totaling approximately 20.08 million units. The EV penetration rate, which is about 19.8% this year, is expected to rise to 23.4% next year.
In China, where EV adoption is well established, improvements in PHEV technology and price reductions are expected to substitute for EV demand. Conversely, in Europe, stricter emissions regulations may lead automakers to artificially reduce internal combustion engine vehicle sales. Starting next year, automakers in Europe will face fines if the carbon dioxide emissions of their new car sales exceed certain thresholds.
Currently, only automakers such as Volvo and Tesla meet these standards, Jang added. Even if hybrid vehicle sales account for about 25%, the combined sales share of EVs and PHEVs will need to exceed 30% to avoid fines.
The event gathered experts from various fields to review major issues in the automotive industry over the past year and to forecast the market for next year. Kim Hyoseon, a director at the Ministry of Trade, Industry and Energy, addressed policy issues related to the automotive industry including EVs for the coming year. Professor Hong Seongsu of Seoul National University presented on trends and prospects in software-defined vehicle (SDV) development. Jang Moonsu, a research fellow at Hyundai Motor Securities, analyzed Hyundai Motor Group’s present and future from the perspective of investors and capital markets.
Na Seungsik, president of the Korea Automotive Technology Institute, stated, "As the years go by, the automotive industry is expanding more broadly and rapidly changing with the emergence of innovative technologies such as electrification and eco-friendliness. We will seek effective strategies to promote solid growth and a leap forward for our automotive industry."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
