We Forecast 40% Electric Vehicle Adoption by 2030, Up From 10% in 2022

In 2022, battery electric vehicles represented nearly 10% of global auto sales, up from a little less than 6% in 2021. Much of the growth occurred in China, which has been a leader in EV sales over the past decade. However, with national EV subsidies in China expiring in 2022 and far lower sales in the U.S. and Europe, the market questions if EV sales can continue to grow without subsides.

The growth can and will continue. By 2030, we forecast EVs will account for 40% of global auto sales. While EVs will still cost more upfront for most auto categories, we expect falling battery costs will drive cost parity on a total cost of ownership basis over the next couple of years in the majority of autos. Consumer function concerns are rapidly disappearing. As EVs have reached range parity with internal combustion engines and charge times have fallen, the buildout of chargers across highways and in cities throughout the world will drive higher EV sales even without subsidies.

We see strong opportunities for investors throughout the EV supply chain. While multiple companies will benefit from rising EV sales, our top picks are largely based on valuation. Our top automaker picks are General Motors and BYD. For auto suppliers, our top pick is BorgWarner.

Batteries, which are needed in all EVs, will see strong growth. Our top pick is Samsung SDI. In technology, semiconductors and components will benefit from increased content per vehicle. Our top picks are Infineon for automotive-related semiconductors and Sensata for components.

In materials, lithium is our preferred resource as lithium is the vital resource needed in all EV batteries. Albemarle is our top pick. Outside of lithium, copper, cobalt, and nickel should all see rising demand, and we like Glencore. Specialty chemicals will see increased content per vehicle. Our top pick is Celanese. In EV charging, ChargePoint is our top pick, while we like Edison International for charging infrastructure.