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The global EV market outlook: growth, growth and more growth

The rise of electric cars has been talked about for years. Now the time has come: The world is moving full force towards electrification of mobility. The electric vehicle market is growing approximately 40 to 80 percent each year, depending on the market area. In Autumn 2020, already one in ten cars sold in Europe was an electric vehicle. But this is just the start. Today we discuss about the market growth and outlook.

Guest: Jussi Palola, CEO of Virta

Host: Jason Millward

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Jason M. 

Hello there and welcome. My name is Jason Millward and you are listening to Plugged into Virta - the electric vehicle charging podcast. The future of mobility is electric. In this podcast we will discuss the newest and hottest topics in the world of e-mobility, smart EV charging, energy management and the business around it. We will go under the surface and discuss openly about the challenges, opportunities, solutions and trends. 

We will give you honest, fact-based information and tell you what it means in practise, in plain English. So, if you want to hear insights from top experts, learn more about the world of EV charging and the future outlook, or just want to listen to some inspiring stories from around the world of EV charging, this podcast is for you. 


Jason M. 

Today's episode is about the global electric vehicle market outlook, which is a lot of growth. I'm joined today by Jussi Palola, the CEO of Europe's fastest growing EV charging company Virta. Thank you for joining us. 

The rise of electric cars has been talked about for years. Now, the time has come, the world is moving full force towards electrification of mobility. The electric vehicle market is growing approximately 40 to 80% each year, depending on the market area. In autumn of 2020, already one in 10 cars sold in Europe was an electric vehicle, but this is just the start. 

So today we're going to discuss about the market growth and outlook. But before we dive into today's subject, maybe you could just tell us a little bit about yourself, Jussi, and what do you do.  

Jussi P. 

I'm enthusiastic about new energy world and electric vehicles and these really form a deep relationship in the energy system, due to the energy storages of electric vehicles. Sometimes people ask if I'm a car enthusiast. No, I don't that much care about cars, but what I care about is that the energy future and electric vehicles are really deeply connected. The big global chains of global energy system and sustainable mobility, but also sustainable energy production. 

Jason M. 

So, you said already that in 2013, it was clear to you that the future of mobility is electric. But back in 2016, a mere five years ago, for example in Finland, when the Ministry of Transport estimated that there will be 200,000 electric vehicles in Finland by 2030. Now that 1 in 10 vehicles sold in Europe is electric, and the IEA estimates that there will be 140 to 240 million electric vehicles by 2030. Did you see this coming? 

Jussi P. 

The numbers, of course, I've been playing with for 12 years. The scenario development, different types of scenarios. In a sense, I would say that this is kind of honey pouring down. It is not so complex to predict this world. Why? Because there's lots of inertia. Changing global vehicle fleet is a tremendous task. It is certain inertia related to that. Even if we would have a perfect solution, changing that would require tens of years. As a background, I have a PhD in Power system evolution for long term investment, and there are certain rules, which you can see in this system and looking down the fundamentals. 

I was starting with my colleagues more than 10 years ago to look at this topic. For example, with Elias Pöyry, we have been cooperating for a long time, even before Virta was formed, to look at what is happening around the world. And what we did is that we had really focused on understanding the world, travelling different continents, all the continents, analysing what is happening in the world. 

And what became visible is one really tremendous thing. It is that the global energy system is changing. It was visible that there's lots of pressure there to decarbonise the power generation and there is no other way than to concentrate on renewable energy. And in order to bring renewable energy, you need storages, to back the system up, to support the volatility of the energy production. 

Actually, in 2011, I was analysing the battery storage prices in general. I was actually making this kind of inquiries to big companies that: How much does it cost to order a stationary storage, let's say one big storage? And then I get the offers and there was for example one company stating that 2500 EUR per kWh, they can deliver. Then I started to look and analyse the situation and compare the world and back then it was visible that Nissan Leaf is coming, and they had a 24-kWh battery pack and when I divided the car price and the battery pack, it resulted in 1800 EUR per kWh. So, ordering just the battery pack was more expensive than the whole car. 

What is the difference between these stationary storages, they are connected to medium sized network which is of course an interesting point, but usually the balancing power is required at the low voltage level. The electric vehicle is much better located for this kind of reserve power capabilities. And then it struck me when I just analysed this really simple thing - price. 

On top of the energy storage, you can get a car which is more efficient, which is more environmentally friendly, and you can create an additional benefit. So, the equation began to be quite clear to me. I knew that this change is going to happen. 

Then analysing the shift, what kind of inertia there is, how many cars are sold every year, how many years it takes an automotive company to develop a new model, they are quite simple rules. Therefore, prediction is somewhat reasonable to do. 

Generally, the long-term evolution, we tend to have this kind of lower estimates than the reality and the short-term estimates, we have a tendency of having higher estimates, I think this is as well happening. 

Jason M. 

Okay, all right. So, the EV charging market is growing even faster than the electric vehicle market. What are the biggest reasons that the market growth has accelerated so much in the past, say, 1.5 years? 

Jussi P. 

If I would mention one word, it’s Tesla and then another word would be Nissan. Those companies have taken the step of electrification much earlier than the others. Of course, in the 90s, Toyota was really driving the hybrid car and changes forward, but after that it was actually Tesla who brought attention to the battery electric vehicles that are cool, that are fast, that are nicer than any other car. 

And when we look, let's say, three years back, four years back, we started to see statistics that Tesla started to have out of proportion market share in the premium segment. BMW, Mercedes, Audi, Porsche was losing the deals, losing the market, losing the grip. So, Tesla has driven and actually forced these companies to act, and they have acted and analysed that situation many years ago already and know how it affects let's say 1.5 years ago. The results are becoming to be visible of that work, but I would put lots of merit to Tesla and also to Nissan, that they are pushing through EVs. Especially Tesla has made EVs look cool. 

Jason M. 

But there are big differences between countries and continents. So for example, Norway has already achieved a critical mass adoption state, but India is a completely different story. So, what needs to be done to get everyone on board with this? 

Jussi P. 

I think this is following the general rule of adoption of the new technologies. Usually, the equation goes GDP per capita. And this is really clearly visible in the electrification – Norway, Switzerland, Netherlands – which can, let's say, afford to take first steps in the topic. And this is due to the principles of financial situation of the country. Because subsidies are driving the market and have been driving in the early years. Of course, in the longer term, I actually saw many years ago, study from UK Ministery of Transportation that between 2015 to 2025, there's a period where the countries can choose which kind of engine is best for the consumer, monetary wise. And why? The taxation. Taxation can adjust the equation when the EV is more affordable or more expensive. 

And this is now happening and the results from the study was that after 2025, there is no way that even the taxation can bring the gap for real cars anymore. 

Jason M. 

So, the future of mobility is electric, but how soon will the internal combustion engine not be an option anymore? And will the future be fully electric? For example, is there going to be a role for different alternative views like hydrogen, for example? 

Jussi P. 

For hydrogen, I would take a specific topic. I've been cooperating a lot with energy professionals and oil industry professionals and one really interesting example is that usually the unit which is being responsible for R&D in the oil company, they are also dealing with us, the electrification. And I have many times met PhD in this hydrogen technologies, in the oil companies. Based on their assumptions, they say that this is not the near future thing. There is, let's say, the economic cost, it is too far away. 

Even they would like to say that yes, this is the future, but I would say that this is a daydream of some oil companies that hydrogen would come, because it is exactly the same like the oil. It is fuelled in the same kind of places. 

And so, that is the reason. Maybe somebody is more interested in this topic, but I don't see this is a near term future. One of the reasons is that the fuel cell is not efficient even though it's more efficient than internal combustion engine. But, let's say, it's 20% plus the efficiency of a gasoline engine, but the fuel cell is 30 plus and an electric battery in electric vehicles is 70 plus so even though there would be better prices for hydrogen technology, and they could have a replacement for platina, of course there is a replacement, but not an efficient replacement. Then the reality is such that this is still inefficient, so I don't see this as a short-term view. 

Like said, inefficiency is the fundamental physical reason. I don't believe that it is going to be the solution. 

Jason M. 

Okay. I could actually go on with this, but I don't want to go into much time. I'm kind of fascinated by the different technologies, especially like, you know, what goes into actually making a battery in the rare earth materials that we have which are finite for example, but well, see hydrogen is very abundant. It's the most abundant element in the universe, so. To me, that kind of sustainability of making batteries and that sort of thing kind of interests me, but I'm only a layman, so I don't really... 

Jussi P. 

Yeah, you can ask. We can debate on this. Maybe you can take a trip to the Sun and fetch the hydrogen there. 

Jason M. 

Get into space and start mining asteroids for other rare earth elements that can make it more interesting. Is there anything you'd like to add then before we close this out? 

Jussi P. 

I am really happy that Virta is already serving 7.1% of the EV drivers in Europe. So, we are looking forward to expanding the service in other continents. We have started the cooperation in Japan and eventually I see the platforms will grow global. That is the inevitable way of the electrification. So, today Virta is operating 7.1% market share in Europe and the market growth is going to be really fast. Actually, absolute figures every year from now on, there will be more electric vehicles coming. So, it's going to be really interesting. Lots of work, of course, but I think fun along the way. 

Jason M. 

Yeah, okay, well Jussi, thank you very much for coming along. It's been a pleasure. 

Jussi P. 

Thanks a lot, thanks all. 



Jason M. 

And that’s it for this episode of Plugged into Virta: The electric vehicle charging podcast. Thank you for listening! 

If you liked this podcast, don’t forget to follow and subscribe. And please share it to your colleagues and friends. We appreciate all your feedback, reviews and ratings, too. 

You can connect with us on LinkedIn @virtaltd. 

And if you are looking for more information about EV charging, e-mobility and energy management, visit us at www.virta.global. 

Until next time, thank you for joining us. Let’s take charge of the future – together.  

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