Sales of electric vehicles have surged, but what will it take for EVs to go mainstream?

McKinsey&Company

Three key issues for auto leaders ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 
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McKinsey & Company
On Point | TODAY'S NEWS. TOMORROW'S INSIGHTS
On Point | TODAY'S NEWS. TOMORROW'S INSIGHTS
The road ahead for EVs
In the news
Fast, but not fast enough. Mobility accounts for around one-fifth of global carbon emissions—which means that ramping up electric-vehicle (EV) sales is critical in meeting net-zero targets. In 2021, global electric-car sales more than doubled, which translates to around one in 12 new cars sold. However, the electrification of transport isn’t happening fast enough. Roughly 16 million EVs are on the road today—just a fraction of the world’s 1.2 billion cars. To stay on track for global net-zero emissions by 2050, the world will need 250 million EVs on the road by 2030. [Economist]
Powering through. Despite supply chain issues and COVID-19-related disruptions, EV sales in China have generally stayed strong. At least four EV makers in China sold more than 10,000 vehicles in May 2022. One Chinese EV company sold more than 114,000 EVs, an increase of 8% from the previous month and 360% from the prior year. Additionally, more EVs that are made in China are now being exported to Europe. Europe’s EV market is attractive in part because of its existing charging network and EV-purchasing subsidies, analysts say. [Bloomberg]
In China, the number of public charging stations would have to increase to around five million by 2030, when more than 100 million passenger EVs will be on the roads.
On McKinsey.com
A rapid shift. The automotive industry is gearing up for a shift to electric. Since 2010, investors have spent $280 billion on auto hardware and software, with almost half of this investment going to EVs. Worldwide demand for EVs could grow sixfold from 2021 to 2030, with annual unit sales increasing to roughly 40 million, from 6.5 million, according to McKinsey research. However, the auto industry and related players must address three key issues, including better access to raw materials, before EV production and sales can scale accordingly.
A gigaeconomy. Building more gigafactories, the large facilities where most EV batteries are produced, is one way for the auto industry to scale more quickly. If worldwide EV demand grows as projected, the auto industry would need 200 new gigafactories—in addition to the 130 that already exist—by 2030. Accelerating the rollout of charging infrastructure would also help EVs go mainstream: by 2030, the US could need around 1.2 million public chargers to keep up with demand. A McKinsey Quarterly article describes how the auto industry could evolve.
— Edited by Andrew Simon   
Charge ahead
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by "McKinsey On Point" <publishing@email.mckinsey.com> - 12:52 - 24 Jun 2022