Deloitte Predicts Strong Growth Of EV Market: Oversupply In 10 Years

JAN 22 2019 BY MARK KANE 49

Did we hear oversupply of electric cars?

According to the latest from Deloitte research, sales of plug-in electric cars by 2030 will increase beyond 20 million per year.

Sales currently hit about 2 million in 2018 and the forecast says that it will increase to:

  • 4 million in 2020
  • 12 million in 2025
  • 21 million in 2030 and BEVs will take 70% of total plug-ins segment

The other expectation is that on average, the ownership cost of BEVs is to match petrol and diesel counterparts in the UK by 2021 (globally by 2022).

“Deloitte’s analysis points to two factors in accelerating BEV uptake: growing consumer demand for greener vehicles, coupled with government policies that offer financial incentives while placing inner-city restrictions for gasoline and diesel vehicles.While upfront purchasing costs of EVs remain the biggest barrier for consumers, the research reveals how, as technology improves, this and other consumer concerns will gradually ease over time. Deloitte predicts that by 2024, the cost to own a BEV will be on par with that of a petrol or diesel vehicle, which could boost demand further.”

Michael Woodward, UK automotive partner at Deloitte, said:

“In 2018, we saw global EV sales surpass two million units for the first time; twice those sold in 2017. In the UK, the cost of petrol and diesel vehicle ownership will converge with electric over the next five years. Supported by existing government subsidies and technology advances, this tipping point could be reached as early as 2021. From this point, cost will no longer be a barrier to purchase, and owning an EV will become a realistic, viable option for new buyers.”


Especially interesting is however this notion of oversupply. Deloitte thinks that in about 10 years, we will see a big oversupply of EV, as there will be more production capacity than demand and too many manufacturers.

“A global oversupply of 14 million vehicles is expected as manufacturers’ investment in capacity outpaces demand by 2030.”

“Growing demand for greener vehicles has seen the majority of OEMs announce their ambitions in the EV market and the emergence of a number of new entrants to the automotive market. However, Deloitte’s research suggest that the number of manufacturers is unsustainable.”

Woodward continues:

“Whilst there is a distinct trend developing in the EV market, the story is not a clear cut one. As manufacturers increase their capacity, our projections suggest that supply will vastly outweigh consumer demand by approximately 14 million units over the next decade. This gearing up of EV production is driving a wide ‘expectation gap’ and manufacturers, both incumbent and new entrants alike, will need to adapt towards this new competitive landscape.

“Those that can successfully build trust in their brand, ensure a positive customer experience from initial sale through to aftercare, and reflect consumer shifts towards the sharing economy in future business models will successfully navigate this. Equally, continual investment in engineering talent and the formation of partnerships with bespoke battery producers and third-party mechanic networks will also be important.”

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49 Comments on "Deloitte Predicts Strong Growth Of EV Market: Oversupply In 10 Years"

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Oddly focused on the “EV Market” rather than the Vehicle Market. With 5% annualized energy density improvements. 2017 sales totals were 87 Million vehicles, so they are only projecting 25% penetration.

No way they’re right about that. 25 % is extremely low.

The oversupply argument is simply the old meme “nobody wants to buy EVs” we’ve been hearing forever.

Now that Tesla crushed that meme they are just moving the goalposts to create a new meme.that everyone should be afraid of EV demand 10 years from now.

It will be oversupply because people will switch to bicycles…and ev can’t replace ice cars. What’s new?

EVs are already replacing ice cars. They have captured 8% market share in China last month.
Ask whether ice vehicles have hit their peak there.

I am with you, as I am using human powered bicycle now, will be getting e-assist bicycle.

If we had options like cargo bike, cargo trike with e-assist. I would have added them to my garage for regular use.

I might also get ORA R1, if it launches in INDIA. Quite affordable, enough range for my needs.

Tesla has one model that is “crushing it”. In fact, the world has one EV that is “crushing it”. Well, at least for about 6 months. The future has not been written yet.

The Model 3 is doing well because it is well designed. Well designed products do… well.

Camry sales peaked at ~450k units (just in the US!)
Accord sales peaked at ~417k units (just in the US, many more globally)
There were multiple CUVs ~400K units in the US in 2018
on and on…

“Crushing it” in the auto industry is not selling 100k units in 6 months. EVs have a long way to go to achieve that status.

No, they crushed it.

IMHO they filled pent up demand for a high price, high performance EV with a $7,500 tax credit attached. I doubt that quarterly sales of high end model 3s in the U.S. will grow from here. More likely they will decline to be partly (fully?) replaced by the base model when (if?) it appears. Model 3 sales will not be totally immune from the effects of the declining tax credit. Model Y will take sales from the model 3 just as conventional SUVs and CUVs have taken sedan sales from their manufacturers.

25% of the total light vehicle market being EV and PHEV by 2030 will be quite an achievement. Nobody really knows of course, but the demise of heat engine powered vehicles will almost certainly be slower than EV optimists imagine.

A prediction is not an opinion as a prediction can be right or wrong while an opinion cannot be wrong.

Your logic goes downhill from there.

ICE sales peaked in 2017. All of the growth in car sales in 2018 was due to BEVs.

I would define BEV sales displacing ICE sales as “crushing it”. And the crush is only going to get more intense.

Think of ICE sales being stuck in a room with the walls closing in on all sides. The movement might be slow but it never stops moving. Crushing it will be the end result.

Gah. Now you’ve given me flashbacks to Star Wars.

In the USA, only Tesla showed an increase in sales. All other EV sales combined were down. The total EV market was up in the USA due solely to Tesla sales not only outstripping the losses of the other manufactures, but outstripping the entire market from 2017. This is not a good sign for EV growth as it shows the growth is driven by wealthy enthusiasts in America, and that is not sustainable for long term growth. Musk admitted as much when he wrote a memo to employees telling them they have a lot of work to do as the technology isn’t yet there to produce truly affordable EVs. He’s right.

It’s hard to know what the other manufacturers will do here in America if 2019 ends up with the Model 3 base model coming out, which will drive Tesla sales even higher, and likely force other EV sales even lower. If that happens it will make Toyota’s caution about EVs look damn prescient. Many have put a lot of money into EV development. If sales continue to languish, they could go back to the good ol’ days of “Who Killed the Electric Car?”.

Manufacturers can affect the demand for EVs with something called “marketing.” In California there are some ads for EVs that tout their gee-whiz future and vague green credentials. But they don’t say the cars are quieter, cheaper to operate, more convenient when you recharge at home, less servicing needs, and quicker than gassers. Why? Because explaining those benefits puts the other 12 models that Audi, Chevy, and Nissan sell at a disadvantage, and dealers would freak out. The obvious goal of this tepid marketing is to let buyers know you sell plug-in cars without explaining why anyone would want one. The other aspect of demand is 75% of Americans now accept the reality of human-caused climate change. Tell them their gasser puts 4+tons of CO2 in the air every year that they own it and switching to a plug-in will dramatically reduce that, while offering decent EVs, and we’ll see how many people actually walk the walk when it comes to the environment. I’m an optimist and think people will do the right thing. Conversely, soon people will look at anyone with a garage who buys a $40,000+ gasser and wonder “What the f*** is wrong with you? There’s a… Read more »

EV sales doubled from 2017 to 2018, so it will take them 2 years to double again. HUH? That’s only 40% increase per year.

It will take 5 years to go from 4 million to 12 million which would be a 25% increase per year.

Another 5 years to hit 21 million is 12% increase per year.

Seems a little bit on the conservative side.

I have no idea about the data these analysts use every time they make a prediction but, I can say with some certainty, that they are wrong EVERY single time. Not just wrong but stupidly so on the conservative side.

I suggest we double the sales projections and ignore the fear of over supply.

Maybe the cake will just be divided into more smaller slices ?.

Overpaid blind seers who have no idea about reality.

I expect continued growth at around 50% per year. Which puts us at 100% BEV in 2028.

And 150% in 2029.

It does seem conservative. The oversupply idea seems like they’re projecting that there’s only a certain market segment for EVs, like there’s a limited segment for hybrids.

They’re also assuming that there’s a large % of buyers who won’t want an EV ever, but that really feels like the Nokia idea that most people will want to stick with their flip phones instead of paying extra for a smart phone.

They also seem to be missing the idea that by 2025-2030, many places will be legislating ICE vehicles out of existence, as climate impacts become more and more costly and serious. And for public health reasons.

As gas stations disappear and oil companies falter due to drop in oil demand, and ICE resale values tank, I doubt there’ll be an upper limit on EVs in terms of market share, until it reaches well above ~70% of sales. That last 30% might stubbornly hang onto their dinosaur cars.

Ofc there is limited market for hybrids. Those are somewhat more expensive then ICEs and are main vehicle for driving emissions down for car oems, which means their performance is butchered on the altar of average fleet emissions.
EVs have no trouble in terms of performance. In fact car oems will artificially limit performance, so that they can still segment the market and offer better performance at bigger price point.
So this analogy to hybrids is totally wrong, for quite obvious facts. No knowledge of trade secrets of Toyota are needed here.

There are alot of S-curve evangelists who were saying we are at the cusp of exponetial growth for years… by now I actually believe them. Biggest factor in growth is the price of batteries. At $50 kwh, I believe it does not make any sense to make a ICE car or even pluggin hybrid. $50 kwh is at most 5 years away.

This is not the only limiting factor for EVs. Charging rate is another factor that routinely gets ignored. Regular people want to stick to their regular routine. You might be able to get some to put chargers at home, but many won’t want to drop the extra cash to charge at home, and would prefer to charge where they used to fill up. That demands 5 minute charge times, and no one knows when the battery tech will be able to do that, if ever.

“EV sales doubled from 2017 to 2018, so it will take them 2 years to double again. HUH? That’s only 40% increase per year.“

If you use Rule of 72, it’s only roughly 36%. It’s even less with continuous compound.

Oversupply, you mean like what we are now seeing with the ICE.
The projections seems a bit low, as 20 million is about the number of NEV China will sell in 2030, and while they are big they are not the whole world.
So triple their projections would be about right at the far end, and double them for the short term. Around 60 million in 2030, which is about 70% of the vehicle market.

Anual care sale is 70+ milion of units. But 21 milions anually will overwelm demand.
What did they somoke?

My supposition is that they completely discount the developing world. S.A. Africa, India, as having statically zero sales of evs. So thereby demand is not worldwide. Just playing devil’s advocate, as I disagree with that POV, but currently it’s fairly accurate.

I guess they missed the memo. We’re already there in China.

No, the oversupply is not there, the waiting lists are still long in China. It is getting overcrowded but not oversupplied…

I love all the fanboys on here acting as if there is no validity to these projections solely because they disagree with them.

Stop it with all the groupthink. It’s incredibly naive and a big turnoff to be associated with. Deloitte is a large and highly successful consulting firm. They may not be totally accurate in the end, but their projections are much better supported than your blowhard opinion.

They’re just bean-counters, they have no clue. They just run numbers. No one that works there has had an original thought in years.

Because your “blowhard” opinion that Deloitte knows what they are talking about is more important than those who have followed EVs for decades? Sorry, I see too many professional “analysts” that can’t beat the Dow or the S&P 500. I see too many analysts that forecast the certain demise of Tesla every year for the last five years to believe these so-called experts.

You and the rest of the world will ignore how badly Deloitte forecast the rise of EVs in five years. I laugh at how wrong forecasts have regularly been on countless things. Just because Deloitte is large doesn’t make them flawless.

Supported by what? There is no intelligent support for growth as slow as they predict. The top four cell manufacturers have goals of 400 GW-h of cells by the end of 2020. That is enough for 6-10 million plug-ins in 2021.

Also the idea that anyone would continue to stay in business making ICE for long after BEVs become cheaper is as nutty as the companies that will try it.

No, the 50% increase annual trend for EV sales will most likely continue until ICE is displaced completely. Sometime between 2028 and 2030.

Estimating a slow down in growth is what is funny about their estimate. It has nothing to do with being a fanboy. I don’t have an EV yet, but I can read trends pretty well, and the EV trend is shaping up to be much stronger than this prediction. When we see 3.2+ million EV sales in 2019, compared to 2 million in 2018, then we will see I guess! Then 2020 will be 5.1+ Million and watch out when Battery cost reductions bring ownership costs even with ICE vehicles in 2021, even this prediction backs that up.

I think they are underestimating EV adoption rates by quite a lot. They should multiply their numbers at least 3X.

woo, woo. I want to make a bet.

This article makes no sense.

They point out that BEVs will reach price parity in 2021-2023, and be cheaper thereafter. Why on Earth would any car manufacturer continue to sell ICE that will have to be sold at a loss.

The short answer is they won’t. ICE sales will halt between 2025 and 2027 because they will be too expensive and inconvenient for most.

The high cost of batteries are holding back EV adoption; solve the battery problem and EVs will easily outsell obsolete expensive complicated ICEVs.

easier said than done. preach the choir. didn’t elon musk say that few years ago?

He did.

And exactly as he hoped, battery costs have dropped a long way since he said it, and as a result there are a lot more EVs on the road today at much more affordable prices than a few years ago.

Those prices can and will continue to drop.

Remember that lithium batteries were only invented in the 1990’s; it is naive to think that we’ve reached technological mastery of them in under thirty years; of course prices will continue to come down and capabilities continue to get better.

Small crossovers with 150 mile / 250 km + range are costing just $25,000 before subsidies in China.
Soon these vehicles will come to USA as well.
BYD Yuan EV & BAIC EC-Series are 2 good examples.
Once more of these vehicles come to market, the price will start plummeting just like that of solar panels.

When the new EV’s are available in comparable ICE price ranges in the lower half ($20K to $35K) and when the single charge range is 200+ miles for all models in that price range and when the quick charging capability and infrastructures are established, I can see a lot more people converting to EV.
If any one of those three things fail to happen, yes, there will be oversupply within 10 years.
And the used EV’s will get cheaper and cheaper and cheaper….

So interestingly vehicle sales will double in the next 2 year with massive battery constraint…yet NOT more then double in 2 year periods after battery infrastructure begins to ramp up. 8 years of sata show the smoothest S curve in a more then doubling every 2 years.
Try 4.5 million in 2020
10 million by 2022.

also of interest….the article states global EV sales at 2 million. Curiously Inside EV’s STILL has not filled in a global total for 2018? is someone asleep at the wheel here?

If there is over supply, that can only be good for us EV buyers, as prices should come down.
I’d think is all EV’s are aimed at luxury market, then there will certainly be over supply, but when budget market get EV’s people will flock to them because of their convenience and cheaper operating costs. I’ve just learned i-Pace in Australia will have 2yr or 34,000km service interval. What other vehicle has that? And service will be a few hundred dollars. If budget priced vehicles are the same, then it will be hard to go past that compared to ICE (some of which have twice yearly service intervals or 10,000km in Australia).

I think it was Bill Gates is credited with saying Humans tend to overestimate the rate of change at 2 years and underestimate the rate of change in 10 years.

Cool, so if I wait ten years, EVs will go from absurdly overpriced to astounding bargains once the over supply hits.

So if they’re predicting EV production of 20 million units a year in 10 years but an oversupply of 14 million units in the same timeframe I guess they’re expecting the global new car market to shrink to just 6 million units per year?!

That’s quite the drop! With a global new-car market pushing over 80 million units per year right now that will be a huge drop in the market! A crash even…what do they think will happen to the global economy to make car sales go from 80 million to just 6 million!?

Unless Deloitte is wrong and EV’s will simply replace piston cars, in which case there won’t be an oversupply at all! Or at least until combined EV manufacturing goes over to 80 million units per year or so. Certainly not just 20 million! So there’s plenty of runway left for EV’s. Whatever analyst came up with this “research” clearly does not understand the car market very well and thinks EV’s are just another ‘type’ of car, like station wagon or hatchback. They don’t seem to be understanding that EV’s will REPLACE piston cars, one-for-one in the market.

One of the issues that no one has raised here is the drop in overall auto sales once autonomous vehicles become fully available.

The emergence of a ride-sharing economy, ala Tesla Network, would reduce the need for individually owned vehicles and thus greatly reduce the overall number of annual vehicle sales. If global vehicle sales collapse by 30% or more there would indeed be an oversupply of vehicles.

In my opinion, and based on the arguments brought forth by other contributors here, that would hit ICE vehicles much harder and probably lead to their extinction while hastening the dominance of EVs.