HSBC cuts European and U.S. EV penetration, raises China estimates

HSBC Research on Wednesday cut their 2024-30 European BEV forecasts for the fourth time in a row as they expect a slower adoption curve. The research company also cut their EV penetration forecasts in the US while raising forecasts in China.

Sales penetration of BEV in the EU big 5 countries reached 13% in 2Q23 and 12.4% in 1H23, a 180bps increase y/y. HSBC expects BEV penetration to pick up towards 17-18% in 2H23, similar to the seasonality observed in 2021-22.

Analyst, Edoardo Spina wrote in a note, “Whilst we still believe the gap vs ICE in manufacturing costs will decline over time, industry feedback suggests the pace may be slower than we previously expected, also because of higher battery material costs.”

HSBC reduced their 2024-30 forecasts by 100-150bps to reflect a slower adoption curve. They are currently 1-2ppt below EV-Volume forecasts through 2030, and 3-5ppt through 2035 due to pushback from Germany and Italy on the ban of ICE vehicles by 2035 and the UK allowing the sale of long-range PHEVs beyond 2030.

HSBC also reduced PHEV penetration forecasts by 100-200bps through 20230, and notes a lower penetration y/y in Germany and Italy in 1H23. Spina does not expect EU to meet the proposed 100% EV penetration 2035 target.

The global researcher’s China team raised their 2023-25 forecasts for EV penetration (BEV+PHEV) by c6% thanks to a stronger-than-expected 1H23, a growing number of available EV products in the marketplace and a reduction in the price of lithium.

HSBC slightly increase estimates for EV penetration for 2025e-30 by c.1-2 ppt, with a bull case of nearly 60% in 2025 and 90% in 2030e. Spina trimmed North America BEV penetration forecasts by c200bps for 2023e2025e as BEV share slightly reversed from >7% in Jan-Feb to c6% in the last three months.

By Michael Elkins | [email protected]

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