Year to date, sales of 852,890 NEV s are up 116% from 394,759 units. Battery-only vehicles (BEV s) accounted for 80.4% of the sales, with plug-in hybrid (PHEV) sales making up 19.6% of NEV sales. NEV sales tend to pick up in the final quarter of the year – (in 2017, 49% of the year’s sales were made in the fourth quarter. If this trend continues, Fastmarkets estimates total sales for 2018 could reach around 1.4 million NEVs. Note in Chart 1 the strong recovery in 2018 sales after the subsidy disruptions in June and July.

China PEV sales 2017-2018

In the European Union, plus Switzerland and Norway, third-quarter electric chargeable vehicle (ECV) registrations climbed 23% to 90,242 units, and in the first three quarters, registrations climbed 35.4% to 273,702 units. Of the latter, 49% were BEVs and 51% were PHEVs. While Chart 2 shows that hybrid EVs dominate the registrations, it does show steady growth in BEVs and PHEV s - these were up 37% and 34% respectively in the first three quarters of the year compared with the same period in 2017. As the EV evolution unfolds and as more EV models come to market, we expect the shift from HEVs/internal combustion engines (ICEs) toward ECVs to gain momentum.

Europe EV registrations

In the United States, BEVs have shown outstanding growth, with sales up 110% in the first 10 months of the year compared with the same period in 2017. PHEVs showed 28% growth over the same period. Collectively, growth was up 72%. The ramp-up in Tesla Model 3 has led to the rapid advance in US BEV sales.

US EV registrations

In 2017, Tesla sales accounted for 61% of US BEV sales. In the first 10 months of 2018, Tesla’s market share has reached 77% of US BEV sales, and Model 3 sales account for 55% of all US EV sales and 71% of Tesla’s sales. The lion’s share of the increase in US BEV sales is due to the Model 3. Impressive EV sales look set to continue, and Fastmarkets expects them to continually surprise on the upside. Auto manufacturers continue to push their EV agendas and are investing tens of billions of dollars and euros, not to mention yuan, on their EV programs.

Volkswagen recently said its next wave of EVs will offer 450-550km of range, and with other manufacturers rolling out new models, car buyers will have many more choices. While market consensus is that the price of EVs will converge with internal combustion engine (ICE) vehicles by 2025 and that until that time the inflection point will not be reached, Fastmarkets expects this will happen sooner. Seeing the unfolding trends and given more EV models to choose from, more would-be buyers are expected to consider EVs even before EV and ICE prices converge.

Similar to our view, it was interesting to see comments by Volkswagen chief executive officer Herbert Diess that “… by 2020-21, it will be difficult to take a decision against electric cars because they offer so many convincing points… For those who don’t drive more than 30,000km a year, electric cars will be the first choice.”

In addition, when you have EV ranges of 500km, the average user will probably only have to recharge the vehicle three or four times a month - it will not be so necessary to be able to charge a vehicle at home since charging could be done at work, while shopping or in public parking spaces. Range anxiety and concerns about charging are therefore seen as headwinds that are dying down.

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