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Europe’s EV Production and Sales Set to Overtake China after the U.S.

Europe’s EV Production and Sales Set to Overtake China after the U.S.

In 2013, the number of electric cars produced in Europe came to around 0.11 million units. Just five years later, the figure increased to about 1.24 million units and accounted for about a quarter of the world’s production. The U.S., in comparison, held a share of 22%. 

With numbers like those, it’s pretty apparent that Europe’s electric vehicle market is all set to overtake China, after the U.S. Previously, China was considered the hub of battery electric vehicles and the whole electric car movement. Now, it seems Europe is taking that position.

According to a report from the consulting firm McKinsey, with a production of more than 1.7 million electric cars, Germany could be the world-market leader by 2021. 

Currently, Norway holds the top spot in the list of countries with the highest number of electric cars, with almost 50% of the cars running being some sort of an electric vehicle. Iceland and the Netherlands come in second and third, respectively.

The situation becomes even more evident when you look at the electric car sales for 2019. Sales in China increased by 3% to almost 1.2 million units. In the U.S., surprisingly, there was a decline of more than 10% as sales fell to about 0.32 million units.

However, it’s Europe which has shown remarkable change and improvement. The electric car sales in Europe rose by more than 40%, leaving China and the U.S. far behind.

The McKinsey report also predicts an increase in battery production, which has caused a lot of havoc for many car manufacturer’s supply chains. With an annual growth rate of 47%, Europe’s battery production capacity could reach 290GWh by 2025. Similarly, China’s capacity could reach up to 610GWh, while the U.S. up to 150GWh.

Shifting Focus of Car Manufacturers

It seems E.U.’s laws to curb carbon dioxide emissions and its fines are forcing a lot of the automakers to increase their electric car range. With demand also rising, automakers will continue to work and add even more electric cars to their ranges. 

German car manufacturer BMW recently announced its plans of stopping sales of its iX3 model, which is the electric SUV, in the U.S. BMW is just one of the many automakers who are now shifting their focus towards Europe instead with its rapidly emerging electric car market.

Companies such as Audi, Hyundai, Honda, etc., are focusing more on electric car production and sales in Europe, where the stricter laws and rising demand presents a much higher success rate.

Additionally, according to analysts, in 2020, the electric car market in Europe can increase to around 5 or 7%. By 2021, it could even touch the double digits, which would mean they would be selling up to a million units in a year.

Other than that, it still remains to be seen whether these car companies can produce enough electric cars – so much that they can reach the carbon dioxide emission targets within the next year or so. 

Otherwise, the top thirteen automakers in Europe will have to bear a combined fine of almost 15 billion euros. Although some people like the International Council for Clean Transportation have faith that these car companies will be able to achieve their target.

Moreover, when we’re talking about leading car manufacturers, we can’t forget about Tesla.

Tesla’s Gigafactory and One Millionth Car

Up till now, Europe’s numbers and projections already feel quite promising and impressive. However, we still haven’t taken into account Tesla and its plan to open a Gigafactory near Berlin. 

The automaker plans to have the site running by mid of 2021. Imagine Europe’s production and sales once Tesla has its factory running in full steam.

Any conversation or story on electric cars would be incomplete without mentioning the electric car company, Tesla. Similar to other car manufacturers, Tesla has also been directing its attention away from the U.S. and focusing on production in other countries. 

By the end of 2019, it had started delivering the cars produced in the Shanghai Gigafactory. Tesla built its first gigafactory back in 2016 near Reno, Nevada. With Europe’s growing importance in the electric car market, the gigafactory in Berlin seems like the perfect location. 

Moreover, according to CEO Elon Musk, he’s planed to build as many as twelve such factories all around the world. 

With so much production going on, Tesla’s announcement came as no surprise. Recently, they produced their one-millionth electric car, a red Model Y. Having released their first electric car back in 2008, it took Tesla just about twelve years to reach this milestone. 

Companies such as Volkswagen and Toyota are already manufacturing more than ten million units a year. Therefore, Tesla’s achievement might not seem that remarkable. However, it is still a significant achievement for the overall electric car market.

China’s Electric Car Market and the CoronaVirus

China still remains at the forefront of the electric car race. Chinese automakers hold more than 50% share of the global electric car production. However, with the CoronaVirus outbreak, things look a little bleak. In 2019, China’s share in the global market stood at 53%, which is a drop from 2018. 

Moreover, along with the virus, the falling oil prices have also made traditional fuel or diesel-powered cars more appealing. If that wasn’t enough, China’s market is also facing a shortage of parts along with the decline in demand. 

Regardless of who’s winning and who’s lagging behind in the electric car race, one thing is pretty clear. This was a much-needed initiative and step in the right direction. 

Moreover, there’s still a lot to do on the government and policymakers’ part as well. We need to truly leave behind fuel and diesel-powered engines and shift to pure electric cars. To do so, we still require a lot of investment and infrastructure. 

It’s a long road ahead, but thankfully, it seems we are a bit closer to our destination. 

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