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BHP Update on Electric Vehicles Prospects

Auto News - Published on Mon, 24 Feb 2020

Image Source: Electric Vehicle BHP
Global mining giant BHP said that sales of light duty electric vehicles, the sum of battery powered and plug in hybrids, are estimated to have grown by roughly 5 per cent YoY globally in calendar year 2019, with approximately 2.1 million unit sales. The EV share of total sales increased to 2.4 per cent, up from 2.2 per cent in calendar 2018. Slightly more than half of all EV sales were in China, notwithstanding the fact that its NEV sales fell in calendar 2019. The sales decline was directly related to a large reduction in subsides (ranging from a minimum of –50 per cent to more than –60 per cent in some locations with generous local programs on top of the central subsidy), which commenced at the end of June 2019. Still, the EV fleet in China surpassed 3 million in calendar year 2019, with around 1.1 million light duty EVs sold. China’s share of global EV sales was steady around 53 per cent.

The new regulatory environment in China, whereby fiscal resources previously deployed on subsidies will instead be directly applied towards eco–system bottlenecks, most importantly charging infrastructure, is a positive signpost for longer run EV take–up. Another positive signpost is that, based on draft guidelines, the Chinese authorities look set to raise their NEV sales share target for 2025 from 20 per cent to 25 per cent.38 The proposed target is close to the most aggressive case for China that we consider internally.

Outside China, we note that the United Kingdom pulled its previously announced future ban on internal combustion engine (ICE) vehicles forward from 2040 to 2035. Such moves are confirmatory for our constructive view on this strategic theme.

Our central case global projection for the long term remains that by 2025 EVs will constitute around 2½ per cent of the light duty vehicle fleet and close to 9 per cent of annual sales. By 2035 EVs will constitute around 14 per cent of the light duty vehicle fleet and close to 30 per cent of annual sales. The 14 per cent fleet share in 2035 translates to 275 million EVs on the road. Our low case fleet share for the 2035 time horizon is 7 per cent.

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Posted By : Yogender Pancholi on Mon, 24 Feb 2020
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