• Electric car production is growing as overall automobile output slips.
  • Vehicle sales are projected to drop in all major markets this year except for Japan, Moody’s says.
  • General Motors is taking on electric-car pioneer Tesla. G.M. says it’s created a new electric vehicle battery that offers up to 400 miles of range and will be cheaper than today’s batteries. 

As the global automarket shrinks, its decline accelerated by the coronavirus outbreak, carmakers are starting to pin their hopes on a bright spot: electric vehicles.

The Covid-19 virus is darkening what was already a negative outlook for the industry. Car sales in China plunged 80% in February compared to a year earlier, the China Passenger Car Association said. This comes a week after Moody’s lowered its global car sales forecasts for 2020 because of the coronavirus outbreak. The rating agency said world vehicle sales will fall 2.5% this year, more than its previous prediction of a 0.9% decline. And that’s after global car sales tumbled 4.6% last year.

While internal combustion engines still power the vast majority of the cars on the road, electric vehicles are making up an ever-greater share of the market. New models will soon hit showrooms because of automaker investment, government policies and consumer demand. A boost is expected in 2022, when the cost of an electric vehicle declines to that of a conventional car, according to a Deloitte report in January.

“There is a warm spot in this cold market, however: electric vehicles,” Nathaniel Bullard, a BloombergNEF analyst, wrote in Sparklines newsletter. “Automakers sold 2.1 million plug-in hybrid and purely electric vehicles last year, up 9% from 1.9 million in 2018.”

Electric vehicle sales are projected to grow 14% to 2.4 million vehicles this year, according to BloombergNEF. China is expected to remain the biggest electric vehicle market in 2020, but Europe will see the greatest growth, with a 50% increase to more than 800,000 this year.

G.M. said that it will offer a full line of electric vehicles by 2023, some of which will be aimed at budget-conscious consumers who can’t afford Tesla’s luxury cars. A roomier Chevrolet Bolt EV should hit showrooms this year, while the company expects to unveil electric Hummers and Cadillacs in 2022. The company says it will spend $20 billion on electric and self-driving vehicles by 2025.

“In Europe, the regulatory environment requires that they make substantial strides in the next four years, and automakers are looking at ways to make them,” David Reichmuth, senior vehicles engineer at the Union for Concerned Scientists told Karma. “Here, the Trump administration has tried to roll back gasoline efficiency standards, but the mileage has still improved.”

BMW unveiled its new, all-electric Concept i4 sedan online after the Geneva Motor Show was canceled last month because of the coronavirus outbreak. Unlike most concept cars that never hit showroom floors, the company plans to bring this one to market in the next year.

Governments, especially in Europe and China, are promoting electric vehicles as they attempt to curb the impact of climate change and also look to improve air quality in cities. U.S. states such as California, Maryland and New Jersey are taking the lead in promoting electric vehicles as the Trump administration decided to weaken car-mileage targets.

“It’s important that gasoline mileage continue to improve because most new cars will continue to be powered by gasoline for at least the next few years,” Reichmuth said.