Bloomberg New Energy Finance (BNEF) expects the electric passenger car sales growth rate to cool in 2019.

In its ‘Transition in Energy, Transport – 10 Predictions for 2019’ report, BNEF says there are now almost five-million passenger electric vehicles (EVs) on the road globally.

“We expect another 2.6-million to be sold in 2019. This will represent around a 40% growth rate, down from the 70% growth rate in 2018. China will again lead, with some 1.5-million of those sales, representing around 57% of the global market.”

BNEF says China’s market is in transition, with the recent doubling of sales every year unlikely to hold in 2019.

“We expect subsidies to be cut in February, but with a phase-out period that lasts until the end of the second quarter.

“The ‘New Energy Vehicle’ quota takes effect this year, but the requirements for 2019 are relatively modest.”

This quota requires most automakers to sell a minimum yearly number of new-energy vehicles (such as electric vehicles or plug-in hybrids) from 2019.

BNEF says broader macroeconomic factors, such as higher interest rates and slowing consumer spending, will also impact global EV sales.

In markets like the US and the UK, direct purchase subsidies are already starting to wind down.

“We expect European EV sales to come in just under 500 000,” notes BNEF.

“Growth should be strong in the Nordics and Germany. Sales in Italy have been slow but should start picking up in 2019, while sales in the UK will likely be flat or declining after the government eliminated support for popular plug-in hybrid models.”

BNEF expects North America sales to come in at around 425 000 units, up modestly from 405 000 units.

The Tesla Model 3 surge boosted sales in the second half of 2018, but the momentum will be difficult to maintain unless a lower-cost model can be introduced quickly, says the research house.

Sales in Japan and South Korea combined should reach around 100 000 units.

A factor that could perhaps boost the sale of EVs, is that BNEF expects crude oil prices to end 2019 up on 2018 prices.

BNEF does primary research on clean energy, advanced transport, digital industry, innovative materials and commodities.