“A few years ago you could barely see an electric car at the Frankfurt Auto Show. If you walked around talking about EVs, everybody assumed you were smoking something”, said Shai Agassi, environmental entrepreneur.
In the past decade the global electric vehicle market has taken a huge leap forward and is growing faster than you might realize.
Before the COVID-19 pandemic shook up the automotive sector, electric vehicles were getting a fair amount of public attention: between 2012 and 2018 the growth rates of the EV market were between 46% and 69% and in 2019, the combined annual sales of battery electric vehicles and plug-in hybrid electric vehicles exceeded the two-million-vehicle mark for the first time.
Despite the impacts of COVID-19, the electric vehicle industry has seen steady growth in the in the past couple years, and the market size has grown to 4.18 million units in 2021 from an estimated 3.42 million units in 2020.
Market expansion prospects have resulted in the next generation of luxury automotive manufacturers focusing on electric vehicles, working in the premium branded luxury EVs segment, which was created a decade ago by Tesla.
Tesla has a huge lead in the electric car market and has maintained its leadership for almost a decade, but plenty of competitors are now desperate to be seen at the very forefront of the EV market and Teslas have to face Mercedes EQs, BMW i cars, Audi Eetrons and Polestars among others.
The latest challenge launched to Elon Musk’s enterprise comes from the company Lucid Motors, backed by the Kingdom of Saudi Arabia, whose aim is to unseat Tesla with its Lucid Air, which were delivered to the first customers in spring 2021.
Geographically, the global luxury electric vehicle market has been expanding mainly in North America, Europe and Asia Pacific. The Asian market has grown significantly and China boasts the largest EV market thanks to the changing lifestyle led by urbanization and increased awareness about environment safety. Tesla is nearly the only foreign electric vehicle maker with top sales in China, as Chinese electric carmakers are unlikely to become global names any time soon because of their focus on the domestic market. As they seek to achieve an edge within the hyper-competitive market, companies like Nio Inc. and Xpeng Inc., and the new-energy arms of SAIC Motor Corp. and Geely Automobile Holdings Ltd. are paying top-dollar rent to open showrooms in China’s luxurious malls: more than half the malls in Shanghai have at least one electric-vehicle showroom and many others are planned.
Startup brands that want space on the first and most expensive floor pay rents up to $1 million a year just to reach potential customers, benefiting mall owners looking for new lessees now that many people have converted to online shopping.
Beyond its internal market, China aims to become a global automotive superpower, and considers wider penetration of China’s own EVs essential to that objective in the long-term.