More than a decade after Tesla (NASDAQ: TSLA) revealed the electric Roadster and revolutionized the auto sector, electric vehicle (“EV”) sales are steadily on the rise. This is mostly thanks to increasingly restrictive emission standards that have forced automakers to develop zero-emission vehicles that rely on alternative energy sources in a bid to reduce greenhouse gas emissions. Although electric vehicles still make a fraction of the total vehicles sold globally, the emerging space has experienced plenty of growth this year.
Specifically, electric vehicle sales increased by 160% in the first half of 2021 from 2020, with EV makers selling 2.6 million units (26% of global auto vehicle sales). However, this growth has been mostly confined to three markets: China, North America and Europe. China has been the largest electric vehicle market in the world for quite a while now. Chinese buyers purchased 1.1 million electric vehicles in the first six months of the year, representing 12% of total EV sales. Back on home soil, Americans bought just 250,000 electric vehicles, which is only 3% of total EV sales, showing how much work America needs to do before it can catch up to the world’s largest EV market.
According to market forecasts by IDTechEx, the EV space is poised to surpass sales of five million EV units in 2021. If the forecast, which only counts passenger vehicles, comes to pass, the EV sector will have seen an “astonishing” growth rate of 86% CAGR (compound annual growth rate) since 2011, the IDTechEx report says. The electric vehicle industry has also proven to be quite resilient, weathering the coronavirus pandemic and resultant financial crisis with relative ease while most industries struggled to keep the lights on. This is partly due to government involvement in the largest EV markets as authorities in China, America and Europe have made electrification a priority and provided funds to subsidize EV purchases.
Unfortunately, we are still a long way from mass global electric vehicle adoption. Market penetration of these zero-emission offerings has been confined to North America, China, Japan, Europe and the Asia Pacific, with electric vehicle sales in the rest of the world significantly lagging. Limited government involvement, severely stunted public charging infrastructure and the lack of affordable options may be to blame for the low market penetration of EVs in the rest of the world.
Automakers are now working towards a future where EVs are as cheap to produce as their gas and diesel-powered counterparts. They hope to achieve this feat by developing cheaper EV batteries without compromising energy density and safety of the batteries, as well as developing recycling processes that can reuse minerals such as cobalt and lithium from end-of-life electric vehicles.
As more companies such as Net Element (NASDAQ: NETE) enter the electric vehicle space, sales are likely to surge even more given that a lot more options will be available to buyers.
NOTE TO INVESTORS: The latest news and updates relating to Net Element (NASDAQ: NETE) are available in the company’s newsroom at http://ibn.fm/NETE
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