EV Estimates

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November 20, 2020

Mass adoption of EVs, along with the emergence of new EV companies, will mark 2021 as the true beginning of the global shift to transportation electrification. We are sharing our EV estimates out to 2040.

While we were hesitant to project so far out, recent changes have rendered a more realistic outlook. Estimates of this scale require millions of data points and months of modeling. Based on recent national EV targets, li-ion battery price reductions & a clear shift to LFP batteries, promising new entrants to the EV space, public charging infrastructure build outs, and a general consumer shift to EVs, estimating 20 years out isn’t as unreasonable as it has been.

The first chart and the last chart are interactive. Select/deselect the series in the legend to show/hide.

The biggest variable to any EV/AV estimate is varying government policies. To an extent, it is not practical to project EV sales beyond even 2025 due to such an uncertainty. However, in just the past few months, many countries have made their NEV targets significantly more clear, which helps us at least see the general trend better. 

We have seen public charging infrastructure become less of an unknown variable on EV adoption over the last two years, and therefore battery energy density and range anxiety have less of an effect on mass EV adoption. From here on out, affordability and safety will be the most important factors to mass EV adoption, not range and performance.

The key difference between a short-term EV/AV forecast and a long-term forecast is the short-term is highly dependent on the company choosing the right technology approach–both battery chemistry and AV sensor suites/neural nets.

The benefit of forecasting in the long-term is the general assumption that the industry will choose the right technologies, and OEMs will inevitably utilize them. For example, let’s say Tesla is ‘wrong’ in its approach to L4/5 autonomy, in that the cars cannot fully operate autonomously with the current sensor suite (cameras & radar). If, say, LiDAR becomes a clear essential to L4+ AVs (or even that governments require AVs to be equipped with certain sensors or V2X systems, which they will), the assumption is that Tesla will eventually switch to the ‘industry standard’, rather than be left behind. The same framework applies to battery technology. As it currently looks, LFP batteries will be the ‘industry standard’ for some time. Solid-state battery development is nowhere close to where the industry expected. That being said, the companies that do choose the ‘right’ technologies earlier on will have distinct first-mover advantage.

Tesla

Starting with Tesla, we are sharing our company-specific estimates. Tesla is an important company to analyze since it may be the earliest EV/AV company to peak (2032/2033).

Most estimates out there mistime Tesla’s robotaxi rollout. Robotaxi rollouts are just as much about government regulation as they are about technological viability. AV policies vary more by country, county, city, and borough than EV policies.
Unsurprisingly, we believe Tesla will lose market share in the passenger EV space globally after it peaks next year. Market share peaks vary by region mainly due to EV/AV policy. 

First-mover advantage is exactly what got Tesla to its current dominance in the EV space. However, as we know, first-mover advantage doesn’t last forever. This is where many Tesla forecasts go awry. Assuming two in every three passenger EVs sold in 2030 will be made by a single company is unreasonable. Another common mistake some make are zany estimates of total EVs sold. Forecasting Tesla to have an 18% market share in 2024 is fine (ours is 18.29%), but to also forecast Tesla will sell 7.1M EVs that year would suggest 39.4M total EV sales. Among other global EV estimates for 2024, BNEF & Deloitte are forecasting ~7.4M, S&P Global Market Intelligence estimates 6.2M, and we are forecasting 11.4M. We know our 2024 estimate is more bullish than most; 39.4M in just four years is so clearly misguided and misleading. Price targets based on such unfounded assumptions are dangerous.
While investors can certainly be optimistic about a company’s future, they should still be reasonable and practical about the assumptions on which their theses are based. In 2030, between 25M-35M passenger EVs will be sold globally...total. 

20M deliveries by a single EV maker is unrealistic. That would be more than Toyota and Volkswagen Group’s 2019 sales combined. Vehicle sales have declined since their peak in 2017; even as the global economy recovers from the COVID-19 pandemic, it will take years to recover to pre-COVID sales figures. By that point, there will be many EV options that rival Tesla on price and range.

When we combine our global passenger EV estimates with our estimates for Tesla's regional market share, Tesla's annual passenger deliveries peak in 2032 at 6.87M units. As things currently stand, Tesla may be one of the first to beta test a robotaxi fleet in select (highly gridded) cities. We don't see a meaningful (>8,000 cars in one city) Tesla robotaxi fleet until 2028 at the earliest. We expect Tesla's sales to be strong in the few years following the first successful robotaxi deployment, but competitors will quickly catch up, and first-mover syndrome will again kick in.

Electric vehicle's comparative longevity over ICE vehicles has been an important selling point. The fact of the matter is: EVs' sales cycles will be considerably longer, and therefore, demand in areas with high EV/AV saturation will plateau, and eventually decline.

We have also broken down Tesla’s sales by model based on current timelines for future product rollouts. In the long-term, the lower-priced models (3/Y/$25k model) will be Tesla’s best-selling. Cybertruck will be relatively short-lived–we just cannot see it being a long-term player in the relatively few pickup truck markets, especially as electric pickup trucks from Ford, GM, Rivian, Lordstown, etc. roll out. We see Cybertruck sales peaking in 2027 at 206,000, and falling sharply thereafter. Roadster will be too expensive to make up any meaningful sales, especially as competitors roll out more electric supercars, even in the next few years. Model S and X are already becoming less popular due to the cannibalization from 3 and Y, and a $25k model will only contribute to this decline. Model Y will soon become more popular than Model 3, and the $25k model will become the most popular Tesla model within the first three quarters of its launch. As Tesla brings costs down to produce more cars for the masses, its higher-end model sales will be eclipsed.


A $25k Tesla will be significantly more important over the next decade than its robotaxi fleet. Many estimates assume Tesla’s robotaxi fleet will be deployed as early as next year. The Full Self-Driving beta was released to a handful of Tesla owners last month, and it is already showing how long Tesla still has to go before achieving L4/5, if it's at all possible. Even if Tesla launches robotaxi software next year, it will still undoubtedly require a human driver in the vehicle (L3). Tesla owners may use their own cars for ride-hailing, but fleets of fully autonomous vehicles are years away, and Tesla won’t be the only company to deploy them.

Stay tuned for more company-specific estimates, as well as commercial EV estimates, which will be most meaningful to a cleaner future.

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