Global demand for electric vehicles to grow six-fold by 2030: McKinsey

Annual unit sales of electric vehicles (EVs) are expected to grow from 6.5 million to 40 million globally in the period from 2021 to 2030, according to McKinsey & Company research.

This demand for EVs represents a six-fold growth, following the acceleration of sales and penetration of passenger EVs in major markets in the second half of 2020, despite the global pandemic.

According to the authors, the major constraints facing the growth and scale of the EV industry include difficulty in sourcing raw materials, a lack of EV charging infrastructure and inefficiencies of battery production gigafactories.

“Taking quick action will be key to extending the momentum in EVs and may even help to accelerate adoption of autonomous vehicles (AVs), through which original equipment manufacturers (OEMs) will find even more opportunities in services and life cycle revenues from such things as over-the-air software updates, mapping services, and in-vehicle entertainment,” the report said. 

EV charging

According to the research, the US currently has a network of approximately 100,000 public EV chargers, with the number needing to increase to 1.2 million by 2030 in order to meet demand.

“We estimate that more than $35 billion would be required to get to the 1.2 million public chargers required in the United States, exclusive of grid and electrical upgrade costs.”

Starbucks is one example of a multinational investing in the EV infrastructure challenge, with its pilot program to install EV chargers in its parking lots.

A recent report from Juniper Research reveals that spend on EV charging will exceed $16 billion globally by 2026 with a focus on home charging.

Research author Nick Maynard said, “Home wallboxes are convenient and lower cost than alternatives, with the onus being on both car manufacturers and governments to support home charging roll-outs to secure the future of electric mobility.”

Gigafactories

McKinsey’s research revealed there is a need for 200 additional gigafactories in order to meet the demand projects for EVs until 2030, representing a $400 billion capital deployment.

“Many of the new facilities would likely be built in locations near OEMs to reduce lead times and inventory requirements,” the report said. 

The operational efficiency of the gigafactories also needs improvement.

“If the current trend of delayed production starts and prolonged ramps continue, a McKinsey analysis predicts that 30 percent of newly added annual capacity would be at risk in North America alone by 2025, potentially leaving more than 300,000 vehicles short of batteries each year in that region.”