The electric vehicle market is shrouded in uncertainty. The growth in electric vehicle sales has slow motion; car manufacturers are to move back on the production of electric vehicles; the politics around the subject are becoming more and more unpleasant, as the very idea of driving an electric vehicle has entered the world. culture wars.
But one analyst says don’t worry: “Our long-term outlook for electric vehicles remains bright.” »
This is what market research BloombergNEF reveals, which published the 2024 version of its annual electric vehicle outlook report Wednesday.
By 2023, electric vehicles accounted for 18% of global passenger vehicle sales. By 2030, according to the report, 45% will be electric vehicles. This figure rises to 73% by 2040 – which is still short of what the world needs to reach net zero emissions in transport, according to the company, but enough to achieve major reductions in carbon emissions linked to climate change.
The long-term outlook adds some luster to more recent news, particularly in the United States and California, where an electric vehicle slowdown in sales, led by Teslaspans two quarters, calling into question the state’s climate goals.
A global survey by consulting firm McKinsey, also released Wednesday, includes this surprise: 29% of electric vehicle owners told McKinsey they plan to replace the electric vehicle they purchased with a gas-powered car or diesel, a figure that rises to 38% for electric vehicle owners in the United States. .
Phillip Kampshoff, who leads McKinsey’s Center for Future Mobility in the Americas, said he views electric vehicle sales as “a one-way street.” Once you buy, you become addicted to an electric vehicle. But that’s not what the data shows.
Under a 2020 decree According to Gov. Gavin Newsom, automakers must phase out California sales of new fossil fuel cars by 2035, when only what the state calls “zero-emission vehicles” will be allowed. (The mandate allows 20% of these vehicles to be plug-in hybrids, which can run on fossil fuels.)
Eleven other states are following California’s lead, even as Virginia’s Republican governor plans to give up by the end of the year.
Hardline politics in the United States are affecting consumer attitudes toward electric vehicles, as presidential candidate Donald Trump and his supporters in Congress have turned government regulations on emissions technologies into a red meat problem for MAGA conservatives. Or, as BloombergNEF puts it more kindly: “In the United States, market nervousness, stoked by the upcoming presidential elections, has helped slow adoption this year. »
Beyond politics, the path to electric vehicle growth is fraught with challenges, and different countries are moving at different speeds and with different levels of commitment.
Today, “China, India and France still show signs of healthy growth, but the latest data from Germany, Italy and the United States are more worrying,” BloombergNEF said . Global sales of electric vehicles “are expected to increase from 13.9 million in 2023 to more than 30 million in 2027,” despite the United States falling behind.
Regardless of geography, consumer concerns about price, range, battery life and unreliable public charging continue to dampen many buyers’ enthusiasm for electric vehicles. BloombergNEF’s findings are echoed by consulting firm McKinsey and the AAA automobile club, in their own recent forecasts.
But electric vehicle prices are falling, range is improving and a large number of public charging stations are being installed, which could boost sales growth.
Intention to purchase
Consumers around the world are excited about the idea of buying an electric car, but they’re moving slowly. According to McKinsey, 14% of 30,000 people surveyed worldwide in 2021 said their next vehicle would be an electric vehicle. This year, it’s 18%.
In the United States, it’s a different story, where consumer interest in purchasing an electric vehicle has fallen to 18% this year, according to The AAA investigationup from 23% in 2023. And almost two-thirds said they were unlikely to buy an electric vehicle the next time they bought a car.
Interest in hybrids is growing. One in three people said they would likely buy a hybrid vehicle, a vehicle that adds a small battery to an internal combustion engine to improve fuel efficiency.
That’s bad news for pure electric vehicle sales, at least in the immediate future, said Greg Brannon, head of automotive research at AAA. Early adopters already own their electric vehicles, he said, while traditional buyers remain skeptical.
Tesla’s declining sales, overcapacity and price cuts, as well as CEO Elon Musk’s anticsbodes ill for the American market as a whole. “Tesla is a leading indicator of what’s happening in the electric vehicle market,” Brannon said. “When we see a slowdown at Tesla, we see a slowdown across the board.”
Major automakers are losing billions of dollars in their EV divisions. TeslaMercedes-Benz, General Motors and Ford have all reduced their electric vehicle targets in the United States, at least temporarily. Companies like Hyundai and Kia are not backing down, however. The market is shifting from early adopters to “majority early customers,” Kia CEO Ho Sung Song told Automotive News.
“Once we start catering to the first majority customers, the transition to electrification will be rapid,” Song said. “Our commitment remains resolute. »
Global markets
In China, India and even France, the situation is different. China is the world’s largest seller of automobiles of all types, including electric vehicles. The country has managed to make electric vehicles much cheaper than American and European automakers, and has launched a major export campaign. (THE Biden administration imposes 100% tariffs on electric vehicles made in China to protect domestic manufacturing.)
For the first quarter in China, electric vehicle sales increased 37%, according to BloombergNEF. In India, it is 39% and in France, 20%. The United States lagged behind, rising just 4%.
Sliding on the S-curve?
BloombergNEF and McKinsey said electric vehicle sales appear to be on the flat part of what business circles call the S-curve. Sales of a popular new technology take off quickly among early adopters, then stagnate for some time while mainstream customers consider their options, then resume if the mainstream buys in.
McKinsey’s Kampshoff said he personally believes the general public will get involved — but perhaps not as aggressively as the industry once hoped. The consultancy reduced its growth projections for 2030 by 15 to 20 percent, he said.
Still, “while we expect slower adoption, overall we remain quite optimistic.”
