Pivoting to an Electrified Future – The Automotive Industry Amps Up
The Automotive Industry Amps Up
As we emerge from the COVID-19 crisis, the automotive industry is pivoting sharply to an electrified future. IHS Markit analyzes the drivers of this change and the new trajectory that the industry is following. The year 2027 emerges as a tipping point for an acceleration in EV adoption, and by 2030 over one in four new passenger cars sold will be an EV.
The world has undergone two significant dislocations in recent years. As of February 2021, 194 states and the European Union have signed the Paris Climate agreement (COP-21), which effectively sets the legislative framework for the decarbonization of the global economy. Policies targeting emissions from transportation, which amount to about one-third of overall greenhouse gas (GHG) emissions in the EU or the US, are becoming a central plank in governmental policy. In addition, as governments grapple with huge adjustments in their fiscal balances after the COVID-19 pandemic, an even greater relative focus has been placed on supporting low-carbon growth strategies. The COVID-19 crisis has arguably accelerated the promotion of electrified vehicles as part of an overall green-friendly solution. Rather than resisting this trend, OEMs are now actively embracing it, with many planning to go completely electric. Therefore, IHS Markit analysts have significantly increased the forecasts for global electrification. The year 2027 emerges as a tipping point after which rates of electric vehicle (EV) sales will rise sharply. By 2030, one in four new passenger car sales will be fully electric-with rates much higher by 2040. This article seeks to outline the key drivers of this new accelerated trend and their impact on the industry's propulsion choices. This high-level assessment of the forecast will be incorporated into each of the IHS Markit forecast product sets in the upcoming months.
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- Legislative forces become irresistible
- COVID-19, the unlikely electrification accelerator
- The economic stars of EV adoption are aligning-2027 is a key tipping point
- OEMs adopt the EV narrative en-masse
- Outlook for EV adoption is revised up significantly