Strong EV Growth in China

The first half of 2022 was a bumper for electric vehicle registrations worldwide. Rising fuel prices, tightening emissions targets and continuing purchase incentives drove growth. The total number of EV registrations pipped 4.2 million, up a stonking 63% on the first half of 2021.

Sales could have been better were it not for chip shortages and supply chain disruptions, caused by the conflict in Ukraine. Ukraine produces half of the world’s neon, which is critical for making semiconductors used by the auto industry.

Plugin EVs are gaining market share the world over, but the picture is different country by country. Norway had the biggest market share of EVs in H1 77% and China at 21%, while the fastest growing were India, with 273%, and New Zealand with 260%.

Astonishingly, China – where since the pandemic began in early 2020 have been strictly enforced restrictions on the movement of people, commerce and industry – bought 2.4 million of those cars. Between January and June 2022, EVs accounted for 26% of all cars sold in the country, up from 10% in H1 2021, according to data collected by Canalys.

Two billionaires battled it out for market supremacy in China over the period. BYD, backed by Warren Buffet, prevailed, snagging six of the top-10 best-selling EVs. Elon Musk’s Tesla came in third on sales behind another homegrown company SAIC. Tesla struggled to maintain production during a two-month lockdown of Shanghai, where its Chinese gigafactory is located.

The next largest market for EV registrations in H1 2022 was Europe. Citizens bought 1.1 million EVs, amounting to 20% of global sales, up from 16% in the same period 2021. Sales in the continent are slowing down, to only 9% over 2021. Demand for plug-in hybrids has shrunk as drivers become more cautious of investing in a vehicle whose days are numbered on the roads.

Volkswagen was the biggest seller of EVs in Europe during the period, with about 116,000 unites. Stellantis followed the German company with sales of 105,000. Tesla in third place with 78,000, has been steadily losing market share to European car companies as the range on offer grows.

Of the three biggest EV markets, the U.S. is growing apace but still lags China and Europe in absolute sales. Americans bought more than 414,000 EVs in H1 2022, a 62% increase year-on-year.

California’s generous EV purchase incentives and large urban population make it the biggest e-mobility market in the country. Meanwhile, the oil state of Texas is on the leader board for the fastest growth. Data gathered by the Texas Department of Transportation shows that by July 2022, the state had 98,945 BEVs registered, year-on-year growth of 55%.

Texans are snapping up Ford’s F150 Lightning electric pickup truck. The runaway success of the Lightning pushed Ford to quadruple production targets to 150,000 trucks by mid-2023, up from 40,000.

Tesla was of course the biggest seller in the U.S. in H1 2022, with almost 60% of sales. Musk’s dominance is in part because of the limited number of EV models offered by the legacy carmakers.

All in all, 2022 looks good, but a looming recession and the war in Ukraine not abating, new orders for EVs in H2 into 2023 could dwindle. A deep global recession is imminent, which will also hamper sales. Since the lubricant industry is in the same economic boat as everyone else, depressed EV sales won’t stop the trend toward e-mobility.