The electric vehicle (EV) market is poised for a significant year in 2024, as projections indicate a surge in sales despite economic uncertainties. According to research by Rystad Energy, global EV sales are expected to reach 17.5 million units this year, marking an 18.5% increase from the previous year. This growth is attributed to the rising demand for emission-reducing vehicles amid tightening environmental regulations.
China, a dominant player in the EV sector, is anticipated to drive much of this expansion, with an estimated 11.5 million new EVs projected to be sold within its borders, representing a staggering 44% share of all new car sales worldwide. Notably, China’s EV market saw a robust 37% annual growth in sales in the previous year, solidifying its position as a key market for EV manufacturers.
In December alone, China accounted for a substantial 69% of all new EV sales globally, underscoring its significance in the EV landscape. The country has also revised its EV penetration targets, aiming for a 45% market share by 2027, further emphasizing its commitment to EV adoption.
Outside of China, Europe and the United States present different scenarios. While Europe anticipates moderate growth in EV penetration, the US market faced challenges in 2023 due to uncertainties surrounding tax credits and interest rates, hampering consumer decisions to transition to electric vehicles.
PHEVs (plug-in hybrid electric vehicles) are also gaining traction in the market, particularly in regions like the US where consumer preference has shifted towards these hybrid models. However, questions linger about their long-term viability compared to battery electric vehicles (BEVs).
In terms of manufacturing, Tesla and BYD emerge as notable contenders. Tesla reported a robust fourth quarter in 2023, achieving record EV deliveries and marking a solid recovery from previous quarters. Meanwhile, Chinese manufacturer BYD surpassed Tesla in BEV deliveries during the same period, signaling its growing prominence in the EV market.
Elon Musk, CEO of Tesla, has expressed concerns regarding sustaining the company’s growth into 2024. Musk highlighted Tesla’s focus on refining the development of the Model 2 in Austin, Texas, before proceeding with plans to construct a factory in Mexico, potentially leading to delays in expansion south of the border.
Meanwhile, BYD, a prominent Chinese manufacturer, emerged as the top EV automaker in 2023, surpassing Tesla in BEV deliveries, especially in the fourth quarter. BYD achieved over 942,000 EV sales in the final quarter of 2023 and totaled 3 million EVs annually.
Although BYD didn’t meet its initial 4-million target, its performance remained within the projected range of 2.75 million sales. To meet sales objectives, BYD incentivized dealers with up to $93 per car sold, resulting in a significant expenditure of 1.5 billion yuan ($211 million). Looking ahead, BYD appears poised to sustain its growth trajectory and aims to achieve the 4-million target set for the upcoming year.
