Key automotive trends in 2021
The Economist published its “Industries in 2021” trends and predictions for 2021 – including for the automotive industry.
1. The future is electric
Stimulated by government incentives, the enforcement of stricter emissions targets and the launch of new EV models, the Economist expects global EV sales to increase by 37% in 2021, to 3.4m units - although they will still account for just 4% of global car sales.2
That said, in China, EV subsidies are slowly being cut, particularly for more expensive cars, while delays to emission standards will reduce the pressure on automakers to make the switch to EV-only. There is good news, however – the US might restore full tax credits and provide an additional rebate on EV purchases after the election of President Biden.
Sales of diesel vehicles will slump further, with governments hungry for revenue likely to raise fuel and emissions taxes further.3
2. Increase in delivery vehicle sales
Boosted by e-commerce, delivery vehicle growth will outpace that of passenger vehicles. Commercial vehicle sales are set to increase by 16% this year (passenger cars will rise by 15%).^4 ^Low interest rates and attractive financing deals will also fuel some of the rebound in China and other major markets.
The online shopping boom and increase in last mile delivery will also drive the demand for electric commercial vehicles – enabling more and more zero emission deliveries.
Quote: “The good news is that OEMs are making more electric delivery vehicles than ever before, so in 2021 there’s no excuse not to swap the white van for a green van and make each and every delivery zero-emission” – Mark Lovett 5
3. Trade barriers and import tariffs impact automotive production
The United States is prepared to impose heavy tariffs on auto parts imported from China in order to encourage automakers to source supplies closer to home. At the same time, Brexit is likely to roil the UK automotive industry, with the EU unlikely to grant zero-tariff access for UK-made cars with too many foreign components. A global semiconductor shortage will also impact vehicle production.
4. Digitalisation will offer new ways to buy cars
In 2020 nearly everything went online – from the way we work and socialise to the way we shop. With drivers likely to remain wary of visiting dealerships in 2021, it will become more convenient than ever to purchase vehicles from home. The Economist forecasts that “the share of online sales in the overall new car market will rise to 10% in 2021, up from a pre-pandemic estimate of 5%.”6
You can download the Economists full “Industries in 2021” report here.
At LeasePlan we will continue to monitor the supply of new vehicles and changes in the automotive and mobility landscapes. Together with LeasePlan's team of experts who are specialised in the challenging dynamics of today's and tomorrow's mobility market, we are committed to ensuring we can adapt to the ever-changing situation in order to keep our customers as mobile as possible. Ask your LeasePlan contact person for more information or support.
1https://www.eiu.com/public/topical_report.aspx?campaignid=industries2021 2The Economist – Industries in 2021 – page 5 3ACEA: 2020 new passenger diesel car registrations in EU+EFTA decline of 4.8m to 3.1m or -35.2% 4The Economist – Industries in 2021 – page 3 5Mobility insights report 2020 6The Economist – Industries in 2021 – page 7