Nikkei calculated sales volumes based on data from Japan-based research firm MarkLines. New EV sales around the world in 2021 increased to 2.2 times their 2020 level, while new hybrid car sales rose 35% to around 3.1 million. EV sales nearly tripled from 2019, with hybrid sales climbing around 30%.
The jump in EV sales is largely thanks to brisk demand in China, the world’s largest market for such vehicles. According to the China Association of Automobile Manufacturers, new EV sales in 2021 increased 2.6 times from a year earlier to 2.91 million units. Government subsidies and the rollout of cheap models drove more consumers to buy EVs.
Chinese carmaker Wuling launched its low-cost Hong Guang Mini EV in 2020, which was available at around US$4,000. It sold around 420,000 units of the car in 2021. Overall car sales in the country hit 26.27 million units, with EVs accounting for 10% or more of that for the first time.
EV sales are gaining momentum in Western countries too. In Germany, around 340,000 EVs were sold in 2021, 1.8 times more than 2020. That is also four times the number of hybrid cars sold in 2021. In the U.S., around 490,000 EVs were sold in 2021, 1.8 times more than 2020 volumes.
EV sales in Japan stood at around 20,000 units in 2021, highlighting relatively slow market expansion there.
Countries are rushing to accelerate EV penetration in a global push for decarbonization. In Norway, EVs are exempt from value-added tax, helping the vehicles account for half of all new car sales in the nation.
In China, the government mandates large carmakers to sell electric vehicles and other types of environment-friendly vehicles. The European Union aims to ban new sales of gasoline-powered and hybrid cars by 2035.
Elsewhere, the US state of California has excluded hybrid cars from the “zero-emission vehicles” category. The state requires carmakers to produce a certain percentage of zero-emission vehicles.
The Intergovernmental Panel on Climate Change said in a report published last week that EVs that run on electricity produced by methods that emit less carbon dioxide could contribute the most to emission reductions in transportation.
Japan is facing increasing pressure to speed up its rollout of EVs. Honda Motor on Tuesday announced it will pour ¥5 trillion (US$40 billion) over the next decade into the development of EVs and automobile software. It aims to sell 30 EV models globally by 2030 and to produce 2 million units annually.
Toyota Motor also plans to invest ¥4 trillion in EV development by 2030, while its rival Nissan Motor plans to spend ¥2 trillion on the development of electric and hybrid vehicles in the five years until 2026.
Meanwhile, Germany’s Volkswagen plans to invest €52 billion in electric vehicles in the five years until 2026. It aims to make EV sales account for 25% of all its new car sales in 2026 from the current 5%.
US-based Tesla has launched new factories in Germany and the US. Its output capacity is expected to double to 2 million units this year from a year earlier.
Government subsidies and charging infrastructure play a vital role in EV penetration. While hybrid car sales are still increasing and unlikely to abate immediately, it is becoming clearer that overseas carmakers are aiming to lead the global EV race.
According to US-based consulting firm Alix Partners, global automobile giants are expected to invest US$330 billion in the development of EVs in the five years till 2025. The global battle for EV supremacy, amid a change in key components such as batteries, may even determine the future of the Japanese economy, which has been driven by the automobile industry.