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October EV Monthly Report Card – Narrative Continues to Strengthen, Raising LT EV Estimates

In conjunction with our colleagues covering global autos, we raise our 2030 global EV estimates. Our revised estimates reflect more aggressive government policies toward decarbonization and more significant commitments by automakers globally to make the EV transition.  We assume China and Europe will lead the way on EV penetration, but we also raise our forecasts for the United States.

Key takes from October EV sales: Global EV penetration was still well ahead of the YTD pace in October. All regions continued momentum from recent months. Global EV sales were up y/y in October, indicating that EV uptake is sizably outweighing the semi shortage impact. From a penetration perspective, Europe still led ahead of the 2021 YTD pace. EV sales in the US continue to lag vs. China and Europe.

While we await the full set of November EV data, the preliminary take is that EV sales showed continued growth, even in the face of supply shortages driven by the semiconductor challenges.

EV sales have accounted for 8% of total light-vehicle sales YTD, EV penetration has sharply increased in both Europe and China, with uptake increase in the US as well. EV uptake continues to be driven mainly by government action (CO2 targets, subsidies). However, we would argue that there are also some signs of consumer-led uptake. Moreover, with governments doubling down on decarbonization (and thus pushing efforts on EV uptake), and with the legacy auto industry committing a staggering number of investments over the coming years to make the transition to an EV world (nearly half a trillion $ in aggregate), it reinforces EV uptake will only further accelerate.

EV uptake increasingly a supply question: As we recently discussed post the CS Industrials Conference, supply has become an increasingly critical focus for not only US automakers but for all automakers. The question on EV transition is currently less around demand and more on supply. And with OEMs making large commitments on EV volume and mix over the coming decades, we are seeing increased efforts to ensure ample supply availability. New efforts are part of a deeper and more proactive approach to the supply chain. They are also reflected in newly created partnerships directly with semiconductor suppliers, which will enable better supply chain visibility.

@Dan Levy