What Will New Energy Vehicles Look Like In 2030?

The global automotive industry is undergoing unprecedented significant changes, and the development of new energy vehicles will overturn the past pattern of the automotive industry. Recently, the China Electric Vehicle Hundred People Association and McKinsey jointly released a research report titled "Preliminary Analysis of the Development Pattern of the Global New Energy Vehicle Industry in 2030", summarizing seven landmark trends for industry reference.

1 ONE

Development Trends of Global New Energy Vehicle Market in 2030

The global penetration rate of new energy passenger vehicles is expected to reach 50% by 2030. According to McKinsey's prediction, the global passenger car market is expected to exceed 80 million units by 2030, with nearly 40 million units of new energy vehicles; From the perspective of ownership, the global scale of new energy passenger vehicles is expected to reach 240 million, accounting for nearly 20%.

Chart 1 Development Trends of Global New Energy Vehicle Market in 2030

Data sources: public information, McKinsey, compiled by Chebai Think Tank

Due to different policies, strategies, and promotion levels, the development of new energy vehicle markets in various regions around the world presents differentiated characteristics. With the gradual manifestation of the economic benefits of total cost of ownership (TCO) of new energy vehicles and the improvement of consumer experience brought by smart vehicles, the penetration rate of new energy passenger vehicles in China is expected to approach 70% by 2030, with sales reaching 18 million units; Driven by the ban on combustion and the construction of the domestic power battery industry chain, the penetration rate of new energy passenger vehicles in the EU is expected to reach 8 million units, which will jointly lead the industry development with China. Driven by the IRA tax incentives and various policies such as investment in local industrial chains and infrastructure, the electrification process of automobiles in the United States will accelerate. It is expected that the sales of new energy passenger vehicles will reach 7 million units by 2030, and the penetration rate is expected to reach over 50%.

Although Southeast Asia started relatively late in the development of new energy vehicles, with a current penetration rate of only about 2% for new energy passenger vehicles, in recent years, various countries have introduced a series of policies and measures to encourage development, including providing car purchase subsidies, strengthening charging infrastructure construction, granting tariff preferences, establishing multilateral trade cooperation mechanisms, and setting specific development goals. The new energy vehicle market in Southeast Asia is expected to further grow. It is expected that by 2030, the penetration rate will reach over 20%, with Thailand, Indonesia, and Malaysia becoming important driving countries.

2 TWO

2030 Global Consumption Trends in the New Energy Vehicle Industry

The consumption trend of the global new energy vehicle industry is showing a gradual change, and personalized scenario applications based on intelligence will become the focus of attention for future consumers. In China, due to the popularity of advanced autonomous driving functions in new energy vehicles, both economical and high-end brand new energy vehicle owners have expressed their willingness to pay for advanced autonomous driving functions, especially high-end brand owners (according to market research, 53% of high-end new energy vehicle owners are willing to change brands for autonomous driving functions).

European and American consumers will follow the changing consumer trends in China, shifting their focus from factors such as range, vehicle ownership costs, and battery degradation to intelligent functions such as autonomous driving and intelligent cockpit applications. By 2030, the intelligent functions of automobiles will gradually become popular and become a consensus among global automobile consumers. The Chinese automobile market will continue to lead the global consumption trend and become an important gathering place for global research and development. The level of automotive intelligence will become the main competition track for car companies.

3 THREE

2030 Global Trends in New Energy Vehicle Technology Development

The cost reduction iteration of power batteries and the large-scale application of intelligent technologies such as generative AI will drive the global popularization of new energy vehicles into the fast lane. In terms of electrification, thanks to the iterative breakthroughs in innovative power battery technology, the improvement and refinement of existing processes, as well as the increase in battery production capacity and the stabilization of raw material prices, it is expected that by 2030, the cost of lithium batteries will be further reduced by about 25%, further promoting the realization of "equal price of oil and electricity".

In addition, by 2030, the full integration of the all solid state battery industry chain may be achieved, and the mass production of high specific energy and high safety batteries will further promote the popularization of new energy vehicles. In terms of intelligent technology, with the improvement of sensors, algorithms, and data processing capabilities, intelligent driving functions will become more mature and reliable. The development of artificial intelligence, especially the application of generative AI, will also bring more innovation to the automotive industry, such as autonomous driving decision-making and personalized user experience. The large-scale application and iteration of intelligent technology is expected to drive down the selling price of various high-end new energy vehicles from around 250000 yuan to around 150000 yuan. Price reduction can enable more consumers to enjoy higher-level intelligent functions and enhance their driving experience during the vehicle's service life.

4 FOUR

2030 Global Trends in the Functional Development of New Energy Vehicle Products

The attributes of automotive products are shifting from traditional transportation tools to mobile intelligent spaces. As software defined cars become an industry trend, differentiated competition in the automotive industry will shift from traditional hardware to software and ecosystems. The attributes of automobiles will shift from traditional means of transportation to third living spaces and mobile intelligent spaces, gradually moving towards a product form that integrates with consumer electronics, becoming a full product form based on electronic and electrical architecture as the core, connecting the body domain, intelligent driving domain, power domain, and cabin domain, and based on vehicle, road, and cloud collaboration.

The core functions of new energy vehicles will also undergo corresponding changes in time and space dimensions with the support of leading technologies such as generative AI. In the next 5-10 years, the electrification, interconnection, digitization, and greening processes of the new energy vehicle industry will continue to accelerate, and new energy vehicles will become the ultimate carrier for the integrated development of energy revolution, automotive revolution, consumer revolution, and intelligent revolution.

5 FIVE

Development Trends of Global New Energy Vehicle Supply Chain in 2030

The global new energy vehicle supply chain pattern will shift from "global standardization" to "global regionalization" and "regional differentiation", but no country can achieve self-sufficiency in the entire vehicle supply chain alone. The development of global regionalization of new energy vehicles has changed the standardized supply system that used to serve the world through a single supply chain. It is expected that by 2030, at least 8 regions worldwide will have new energy vehicle sales exceeding one million units. The development of regional scale will promote localized investment in emerging core components such as power batteries. For example, the North American region, which is linked by the United States, Mexico, and Canada, plans to invest $57.6 billion to establish an electric vehicle and power battery industry chain. According to data from the US Department of Energy, it is expected that by 2030, the planned power battery production capacity in North America will reach 1000GWh, nearly 20 times that of 2021, which can support the localized supply demand for 10-13 million electric vehicle batteries.

Europe is also accelerating the improvement of localized supply chains and striving to cultivate the growth of local enterprises. According to the plans announced by various European power battery companies, by 2030, Europe is expected to have a localized battery production capacity of 1200GWh. In addition to the expansion of local battery factories in Europe, power battery companies such as China, the United States, Japan, and South Korea are also accelerating their pace of building factories in Europe, and their mode has shifted from component trade exports to "local production", mainly concentrated in regions adjacent to mainstream vehicle manufacturers such as Germany and Hungary.

Figure 2: 2030 North American Power Battery Capacity Plan

Source: US Department of Energy, Argonne National Laboratory

Figure 3: 2030 European Power Battery Capacity Plan

Data source: Public information, compiled by Chebai Think Tank

On the one hand, China and Europe and America will each play different roles in the supply chain. China has become a supply chain center mainly focused on research and development and production, while Europe and America play a key role in innovation. The supply chain system that was previously driven by Europe and America will shift towards a "new triangle" development pattern of China, Europe, and America, combining regional development characteristics and leveraging different advantages. On the other hand, the trend of global regionalization does not mean giving up on global collaborative development. For example, the top five automotive companies in terms of patent submission volume are distributed in four different countries, and no country can completely monopolize or close all patent technologies. Global cooperation in industrial and supply chains will continue.

6 SIX

Competition Trends in the Global New Energy Vehicle Market in 2030

The development of new energy vehicles in China is reshaping the global automotive industry landscape, and Chinese car companies are expected to occupy multiple positions among the top ten global car companies in terms of sales by 2030. By calculating and deducing the market share of Chinese independent brand automobiles, the future development pattern of Chinese automobiles may present two different scenarios.

Scenario 1: With the current domestic market share of 50% and overseas market share of 7% maintained by Chinese domestic automobile brands, and with the growth of the global automobile market, it is expected that by 2030, China will occupy 2-3 seats in the top ten global automobile companies list.

Scenario 2: With the steady growth of China's domestic and international market share of self owned automobile brands and the establishment of overseas advantages through the export of new energy vehicles, if the domestic market share reaches 60% -75% and the overseas market share reaches 10% -20%, it is expected that by 2030, China will occupy 3-5 seats in the top ten global automobile companies list.

7 SEVEN

2030 Global Automotive Enterprise Competition Trends

The market competition environment for Chinese automobile companies is more intense, while the competition pattern in mature overseas automobile markets is relatively stable. To cope with the rapidly growing user demand and fierce market competition, Chinese car companies have won competitive advantages by accelerating the development speed of new car models and implementing strategies such as price reductions. For example, the average new car model development cycle of Chinese car companies has been reduced to 2-3 years, with over 700 new models launched in 2023 alone. Data shows that the average selling price of Chinese cars will decrease by 15% in 2023, and the price war will escalate again in February 2024, with some models experiencing a price reduction of 20% -30%.

Looking ahead to 2030, with the intensification of competition in the Chinese automotive market, the speed of corporate mergers and acquisitions will accelerate, ultimately evolving into a competitive landscape with a concentration of a few top companies. Over the past decade, the top ten passenger car companies in core automotive markets such as the United States, Germany, and Japan have remained largely unchanged, accounting for over 90% of the local market share. Looking ahead to the future, Chinese automobile companies will gradually decline from their current explosive growth to a competitive landscape with relatively concentrated top companies. The total market share of the top ten automobile companies is expected to increase from the current 70% -75% to 90%.