For the first time ever, electric vehicle (EV) sales growth is surpassing internal combustion engine (ICE) vehicle sales growth in China. After ICE vehicle sales grew by 3 million in 2016, sales of ICE vehicles grew by 600,000 in 2017 and just 50,000 in 2018. At the same time, EV sales and production skyrocketed. According to the China Association of Automobile Manufacturers, EV sales grew 81 percent year on year in the first nine months of 2018. Over the same time period production rose to 734,600 units, putting China on pace to sell over 1,000,000 EVs in 2018. With total vehicle sales just over 29 million, EVs have captured a significant portion of the market and are trending upwards. This development indicates that ICE vehicle sales growth in China may have peaked and China may have reached a tipping point in EV sales.
China is the world's largest market for vehicle sales and we expect that other countries, including the United States, are likely to reach similar tipping points in the coming years. California followed a similar sales growth trend to China. ICE vehicle sales peaked in 2016 and have since declined in 2017 and 2018 by about 2 percent each year. Concurrently, EV sales increased dramatically, reaching 8 percent of market share in 2018. The entire United States has not seen as dramatic of a change in sales growth, but ICE sales have begun to decline and EV sales are on the rise.
As demand for EVs grows, funding has poured into companies building infrastructure to support the growing fleet of EVs in the United States. ChargePoint raised $240 million in November, bringing its total funding above $500 million, to help expand its EV charging network. Volta and FreeWire Technologies, two other companies focused on developing EV charging, raised $35 million and $15 million, respectively, in 2018. Others are focused on charging infrastructure for electric trucks, like Greenlots, which announced a project with Volvo Trucks to network and manage the charging systems to be deployed at Volvo's planned zero-emission warehouses.
Policy and the decreasing total cost of ownership (TOC) of EVs has driven the growth of the EV market. The Economist estimated that TOC for EVs is now cheaper than for ICE vehicles. According to a study by The Boston Consulting Group (BCG), a rapid decrease in battery cost has driven down the TOC of EVs, and BCG expects battery costs to continue to decline over the next decade. The same study predicted that policy will drive the growth of the EV market in the United States between 2020 and 2025. Currently, the United States federal government offers a qualified plug-in electric vehicle tax credit between $2,500 and $7,500 based on each vehicle's traction battery capacity and the gross vehicle weight rating. Additionally, the majority of states offer incentives for EV use. For example, California offers a litany of incentives, including rebates for plug-in hybrids and zero emission light-duty vehicles of up to $5,000. And, Massachusetts offers a zero emission vehicle rebate of up to $2,500. States and the federal government have been quick to incentivize the purchase of EVs by lowering the total cost of ownership for those vehicles. Now, states are looking ahead by creating robust packages of policies to encourage the adoption of EVs that go beyond tax credits or rebates.
California announced on December 14, 2018 that it would transition its public bus fleet to all electric by 2040. In order to do so, 100 percent of new bus purchases will have to be zero emission vehicles by 2029. On the same day, the Commission on the Future of Transportation in the Commonwealth released a report that included recommendations that would put Massachusetts at the forefront of EV and transportation policy in the United States. New, creative policy initiatives and decreasing TOC are likely to push more consumers in the United States away from ICE vehicles towards EVs. If the same sales growth trends continue, the United States could reach a tipping point similar to that in China, and many larger economies would likely follow.
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