It is no surprise that the electric vehicle (EV) market has experienced significant growth over the past decade; the drivers are advancements in technology, increasing environmental awareness, better range, lower price points and supportive government policies.
Locally though this year has been a blood bath for dealers and distributors, affecting new and used EV pricing, due to the rapid changes in subsidies, removal of penalty for large emitters and the introduction of RUC and the resultant over-stocking as sales stalled. Overseas the picture is more nuanced.
In 2024, global EV sales continued to rise, although at a slower pace compared to previous years. According to BloombergNEF, sales of EVs, including both battery-electric and plug-in hybrid vehicles, were projected to reach 16.7 million units, up from 13.9 million in 2023. This represents a solid growth rate, though it is a deceleration from the 33% increase seen in 2023.
Photo by Hyundai Motor Group on Unsplash
One of the key drivers of this growth was the Chinese market, which accounted for approximately 60% of global EV sales1. In China, the EV market remained robust, with sales increasing by nearly 50% in September alone1. The dominance of China in the global EV market is attributed to strong government support, extensive charging infrastructure, and a wide range of affordable EV models.
In contrast, the US and European markets faced some headwinds. In the US, sales growth was tempered by reduced incentives and economic uncertainties2. Despite these challenges, the US market still saw record sales, with around 390,000 EVs sold in the third quarter1. Europe also experienced a slowdown, particularly in Germany, where sales dropped sharply in August due to the end of subsidy programs1.
Several factors influenced the growth of EV sales in 2024. Firstly, the reduction in government incentives in key markets like the US and Germany impacted consumer demand. Automakers such as GM and Ford scaled back their production plans and delayed new model launches, contributing to the slower growth2.
Secondly, the economic environment played a significant role. Inflation and rising interest rates affected consumer purchasing power, making it more challenging for potential buyers to afford new EVs. Additionally, supply chain disruptions and semiconductor shortages continued to impact production schedules and delivery times2.
Despite these challenges, the overall trend remained positive. The increasing availability of affordable EV models, improvements in battery technology, and expanding charging infrastructure continued to support the growth of the EV market.
The outlook for 2025 is cautiously optimistic. BNEF forecasts that global EV sales will continue to grow, driven by the introduction of new, more affordable models and stricter emissions regulations in key markets. The market is expected to benefit from the launch of several low-cost EVs, including the Renault 5 and Hyundai Inster.
The Renault 5, set to be released in 2025, is anticipated to be a game-changer in the European market. Priced competitively, it aims to make EVs accessible to a broader range of consumers. Similarly, the Hyundai Inster is expected to attract significant attention with its affordable pricing and advanced features.
In addition to new models, government policies will continue to play a crucial role in shaping the EV market. In Europe, the tightening of vehicle CO2 targets will incentivize automakers to increase their EV offerings. This regulatory push is likely to result in a surge of new EV models entering the market, further driving sales growth1.
China will maintain its leadership position in the global EV market. The Chinese government’s continued support for the EV industry, coupled with the rapid expansion of charging infrastructure, will sustain high sales volumes. Moreover, the increasing competitiveness of Chinese EV manufacturers on the global stage will contribute to the overall growth of the market1.
For Tesla, still a global powerhouse for EV sales, the picture is complicated. The brand is firmly aligned with Musk, who in turn has aligned himself with Trump in the recent election. 63% of Tesla’s US sales are in the state of California. It has over 50% market share of BEVs there, and one in 8 vehicles sold globally by Tesla is sold in the state. In a Democrat stronghold, aligning yourself with an anti-EV politician is either genius or crazy. California matters because it matters so much to Tesla, who dominate EV sales outside of China, and are very strong in China. If Tesla sales fall as a result of Musk’s increasingly outspoken and controversial worldview, then global EV sales growth could well stall.
The growth of EV sales in 2024, while slower than in previous years, remained robust, driven by strong performance in the Chinese market and the increasing availability of affordable models. Looking ahead to 2025, the introduction of new low-cost EVs like the Renault 5 and Hyundai Inster in Western markets, and the abundance of affordable models from China, spearheaded by BYD, along with supportive government policies, is expected to drive further growth in the global EV market. Despite some challenges, the long-term outlook for EV sales remains positive, with continued advancements in technology and increasing consumer acceptance paving the way for a more sustainable future. It’s just that the growth rates seen over the last decade, won’t be seen again.
This article was written with the assistance of AI.
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