The Global Passenger EV Market to Deploy 762.9 GWh Onto Roads in 2023
A bold data-backed prediction from Adamas Intelligence
In 2023, a booming 762.9 GWh of battery capacity will be deployed onto roads in newly passenger EVs globally (+/- 12%), Adamas Intelligence predicts.
Additionally, in 2023, Adamas projects that 19.7 million passenger EVs (HEVs, PHEVs, BEVs) will be sold globally (+/- 10%), translating to a sales-weighted average pack capacity of 38.7 kWh, up from 34.0 kWh in 2022.
The Adamas rule of thumb for predicting battery capacity deployment
Adamas Intelligence analysis has identified an interesting trend from which we have established an insightful “rule of thumb”.
Over the past 8 years, we have observed that the amount of battery capacity deployed onto roads in December of each year provides a reasonably accurate estimate for the average monthly capacity to be deployed in the year to follow.
In other words, if we multiply the amount of battery capacity deployed onto roads in December of a given year by twelve, the result tends to be within +/- 12% of the actual deployment in the year to follow.
Below we can see the actual battery capacity deployed onto roads each year since 2015 versus what was predicted by the Adamas rule of thumb.
From 2015 through 2018, the rule of thumb predictions were accurate to within a range of +5% and -12%.
In 2019, the rule of thumb over-predicted reality by 35%. This was due to a spike in EV sales in December 2018 in China in advance of subsidy rollbacks that provided a false signal for the year ahead.
In 2020, the rule of thumb over-predicted reality by 12%, or rather, the onslaught of COVID-19 kept reality from reaching predicted levels.
In 2021 and 2022, the Adamas rule of thumb predicted global battery capacity deployment to within 6%, leading us to boldly project that 2023 will see a whopping 762.9 GWh deployed onto roads globally.
Rule also effective at predicting EV unit sales
Similarly, over the past 8 years, we have observed that the number of passenger EVs (HEVs, PHEVs, BEVs) sold in December of each year provides a reasonably accurate estimate for the average monthly sales in the year ahead.
Below we can see the actual passenger EV sales each year since 2015 versus what was predicted by the Adamas rule of thumb.
From 2015 through 2018, the rule of thumb predictions were accurate to within 10%.
In 2019, the rule of thumb over-predicted reality by 23%. As with battery capacity, this was due to a spike in EV sales in December 2018 in China in advance of subsidy rollbacks that provided a false signal for the year ahead.
In 2020 and 2021, the rule of thumb predictions were within 3% of actual sales numbers each year and in 2022 within 6%.
As such, Adamas confidently projects that 19.7 million passenger EVs will be sold globally in 2023, a 29.1% increase over 2022.
Exceptions to the rule
The Adamas rule of thumb provides a solid proxy for the upcoming year assuming that the overarching macroeconomic conditions and incentive structure that exist in December are not fundamentally upended in the year to follow.
Changes to incentives for EVs can stimulate a short-term spike in sales that provides a misleading signal for the year ahead.
Similarly, major changes to macroeconomic conditions, like those provoked by the pandemic or the Russia – Ukraine war, can suppress global EV sales and battery capacity deployment, leading actual market performance to fall short of predictions.
Additionally, it should be noted that the Adamas rule of thumb is not as effective at the level of individual countries, EV types, makes, models, and more. For individual markets or segments, one must take a more nuanced approach.
Lastly, it should be emphasized that the global EV sales market cannot sustain double-digit growth indefinitely. As the market matures and growth slows, the rule of thumb will begin to increasingly overshoot actual results.
However, for the coming 3 to 5 years, we’re confident the Adamas rule of thumb will continue to deliver.
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