EV sales in Asia are projected to jump by 78% yoy in 2021 on China growth

7 Jul, 2021 02:42
source: Singularity Financial

Singularity Financial Hong Kong July 6, 2021 – Electric vehicle June selling data is still rolling in, and it shows the China, the biggest market globally for EVs in particular, is as healthy as ever.

EV sales in Asia are projected to jump by 78.1% year on year in 2021, up from the estimated growth of just 4.8% last year, Fitch Solutions Risk & Industry Research said in a note in June.

Total EV sales in the region will reach a high of just under 10.9m units by the end of 2030, up from an estimated sales volume of just over 1.4m units last year.

The Monday sales report from Chinese auto maker BYD (HKEX: 1211 HKg) reported it delivered more than 41,000 new energy vehicles, or NEVs, in June, up from about 14,000 in June 2020 and up from about 32,000 in May 2021.

XPeng Inc. (HKEX: 9868.HK), another leading Chinese smart EV company, announced its June vehicle delivery results of 6,565 Smart EVs, representing a 617% increase year-over-year, and a 15% increase over last month. The Company also achieved a quarterly record of 17,398 deliveries in the second quarter 2021, marking a 439% increase year-over-year.

Li Auto (ticker: LI) delivered 7,713 vehicles in June, a monthly record for the company. NIO (NIO) might have delivered more, topping 8,000 units in a month for the first time.

The majority of EV demand will stream from the three most advanced economies in the region, namely China, Japan and South Korea.

This year, China is expected to account for close to 91% of the region’s EV sales, while South Korea will account for 4.2% and Japan will account for 2.8%.

China’s EV sales will accelerate this year with a year-on-year expansion of 83%, following estimated growth of 3.6% in 2020.

“China’s EV market will continue to grow as the price differential between internal combustion engine vehicles and EVs shrink,” Fitch Solutions said.

The country was the first major economic power to drive the adoption of EVs and is projected to remain the largest EV market globally through to 2030.

“Also, many first-time vehicle buyers, who enter the market largely due to the fear of being exposed to COVID-19 when using public transportation, are opting to buy small EVs because of government subsidies and the fewer regulatory hurdles involved with buying and owning EVs,” it said.

China’s 14th Five-Year Plan (14FYP), announced on March 11 this year, will have several major implications for China’s automotive industry, specifically for new energy vehicles (NEVs) and autos within the internet of things (IoT).

EV sales in China will average annual growth of 14.9% over 2021-2025 to reach a sales volume of just over 2.25m units.

In South Korea, EV sales will increase by 48.6% year on year to reach an annual sales volume of just under 75,000 units in 2021, as government incentives support consumers to buy EVs.

South Korean EV sales will average annual growth of 26.3% over 2021-2030, to reach an annual sales volume high of around 500,000 units by the end of 2030.

“We believe that South Korean EV sales will continue to grow as the government further incentivises sales by offering scrappage incentives, extending EV subsidies, implementing a carbon tax and potentially limiting the use of internal combustion-engined vehicles,” Fitch Solutions said.

In Japan, EV sales are projected to increase by 11.2% year on year in 2021 to reach an annual sales volume of around 46,000 units.

“We expect EV sales in Japan to pick up from 2022 onwards as the local automakers such as Toyota, Suzuki and Honda all expand their EV offerings,” Fitch Solutions said.