Adamas Intelligence forecasts global passenger EV market to deploy 762.9 GWh onto roads in 2023; December rule of thumb
Adamas Intelligence predicts that in 2023, a booming 762.9 GWh of battery capacity will be deployed onto roads in newly passenger EVs globally (+/- 12%). Additionally, Adamas projects that 19.7 million passenger EVs (HEVs, PHEVs, BEVs) will be sold globally (+/- 10%) in 2023, translating to a sales-weighted average pack capacity of 38.7 kWh, up from 34.0 kWh in 2022.
Adamas Intelligence analysis has identified an interesting trend from which it has derived a “rule of thumb”. Over the past 8 years, Adamas 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, multiplying the amount of battery capacity deployed onto roads in December of a given year by twelve yields a result that tends to be within +/- 12% of the actual deployment in the year to follow.
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 to the projection that 2023 will see a whopping 762.9 GWh deployed onto roads globally.
Similarly, over the past 8 years, Adamas 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.
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.
Caveats. 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, the company said.
Lastly, Adamas 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, Adamas is confident that its rule of thumb will continue to deliver for the coming 3 to 5 years.