Technology has progressed fast in the case of Electric Vehicles (EVs). With improvements in battery technology, the average range of EVs has gone up by around 200%[i] over the last decade. Furthermore, increased number of EV models and improvements in charging infrastructure have enabled electric car makers to tap the market of early adopters. Any technology adoption needs tech enthusiasts who act as product champions and influence others to consider its adoption as well. These consumers, typically young and forward thinking, have considerable risk appetite, greater financial ability, and relative ease with new technology. The tech-savvy early adopters, supported by favourable policies, such as tax credits, and increased EV model availability have helped the proliferation of EVs.
EV growth shifts gear
Today, EVs are not an uncommon sight on roads and parking lots in major markets thus making the idea of sustainable transportation seem feasible.
Today, EVs are not an uncommon sight on roads and parking lots in major markets thus making the idea of sustainable transportation seem feasible. Global EV sales in 2023 were around 14 million units with major markets including China, Europe, and the US accounting for more than 90% of global sales. This translated into 700 GWh of battery capacity deployed on the roads. Global EV sales growth was 58% between 2021-2022 and 32% between 2022-2023. The end of the year sales for 2024 are expected to be around 17 million units with a year-on-year growth of around 25%[ii]. These figures highlight a change in momentum of EV growth and somewhat mixed messages around where EVs are heading in the future. A closer look at some of the leading markets and understanding consumer apprehension unravels the underlying cause for this.
Global trends in EV Sales
EV market dynamics in China
In 2023, the highest number of EVs were sold in China at 7.8 million units, however, China’s increase in EV sales between 2022-2023 was around 26% as compared to 90% the previous year. This was primarily a result of the government’s curtailment of subsidies at the end of 2022, the impact of which was felt in 2023. Despite this, the rise of Chinese EV maker, BYD, has been dramatic as its sales increased by 70% in December and it sold a record half a million BEVs in the last quarter of 2023 itself, surpassing Tesla. This made BYD the second largest BEV maker with 1.5 million registrations after Tesla which registered 1.8 million BEVs in 2023.
Challenges and opportunities in Europe
In Europe, the EV sales saw relatively subdued growth rate in 2023 of around 18% essentially due to the lack of affordable models. Also, in December last year, EV battery capacity deployment in Germany fell by 45% mainly due to an abrupt end in government subsidies. Recently France removed ‘bonus écologique’ for vehicles made in China.
On the other hand, the UK sold its one millionth battery electric vehicle (BEV) in January this year although it has pushed back the ban on sale of new ICE cars from 2030 to 2035. Norway appears committed to its hundred percent fully electric car sales by 2025 as its EV penetration rate reached more than 80% last year.
EV adoption in the United States
For the US, new BEV sales in 2023 exceeded the one million-mark. The increase in EV adoption in the US can be attributed to a greater number of EV models available to the US consumers and tax credits available via the Inflation Reduction Act (IRA). Beginning 2024, in the U.S, the number of cars that qualified for a $7,500 rebate under the new Foreign Entity of Concern regulation dropped. The impact of this is yet to be seen.
Once again, cutting back subsidies draws attention to one of the central questions around EV penetration beyond early adopters and into mass market – the question around affordability and the upfront cost of EVs. Added to this range anxiety and inadequacy of charging infrastructure still weigh heavily on the minds of potential consumers. Concerns continue to exist around charging infrastructure being less developed than gas stations, battery performance affected by cold temperatures and range being compromised when extra load is added. These issues continue to bog down the pace at which transition to EVs takes place. However, the EV base is certainly growing both in terms of unit sales and battery capacity deployed. The regions and countries across the world are hitting milestones towards zero emission vehicles at a different pace slowly but surely.
[i] Evolution of average range of electric vehicles by powertrain, 2010-2021 – Charts – Data & Statistics - IEA
https://rhomotion.com/app/uploads/2024/01/rho-motion-2024-what-to-watch.pdf
“The Nickel Institute (NI) does not endorse any forecast or forward‐looking statement. Anyone wanting to utilize or refer to this publicly available data from an independent third party should cite the original source and not the NI.”
Data Sources: Rho Motion; Adamas Intelligence; Benchmark Mineral Intelligence
