The Electric Vehicle (EV) market is experiencing varied trends across different regions in 2024. While global EV sales continue to rise, some markets face significant slowdowns, and several automakers have adjusted their EV targets. The growth rate varies by segment, with commercial electric vehicles, buses, and two- and three-wheelers seeing high levels of electrification.
Interestingly, EV adoption is no longer limited to wealthy countries. Developing economies such as Thailand, India, Turkey, and Brazil are witnessing record sales, driven by affordable electric models targeted at local buyers. Chinese automakers are rapidly expanding into new markets, seeking opportunities for their EVs abroad.
However, the transition to a clean transport system is being influenced by growing geopolitical tensions. China has established a significant lead in battery production and the EV supply chain through strong, long-term planning and support. In response, Europe, the US, India, and other regions are making efforts to support domestic manufacturing and reduce reliance on China. Tariffs and other protectionist measures could slow global EV adoption in the near term.
Policy support for EVs appears less certain compared to the previous year. Several European governments have reduced subsidies earlier than anticipated, causing a slowdown and prompting calls to relax both near-term CO2 targets and long-term plans to phase out internal combustion engine (ICE) vehicles. The progress in the US will hinge on the outcome of the upcoming presidential election, making China the only major auto market currently experiencing consumer-led growth in EV sales.
Despite these challenges, policymakers must remain focused on long-term goals. While oil demand from transport is expected to peak later this decade, only a few Nordic countries and California are on track to have completely zero-emission passenger vehicle fleets by 2050. The global progress towards net-zero emissions in road transport is lagging, with limited time remaining to achieve these goals. EVs remain the most cost-effective and commercially viable solution for fully decarbonizing transport.
The technology for electrification continues to advance, with several next-generation battery technologies nearing commercialization. Battery prices have dropped by 90% over the past decade, and this trend is expected to continue. Early indicators suggest a sharp decline in prices in 2024 due to lower raw material costs, manufacturing advances, and overcapacity. While this is beneficial for automakers and EV buyers, it presents challenges for new entrants in the battery industry.
The transformation of road transport involves more than just electrification. Shared mobility, vehicle connectivity, and autonomous vehicles are also poised to reshape the automotive and freight markets globally in the coming decades.
BNEF’s 2024 Electric Vehicle Outlook provides a comprehensive analysis of these trends and presents two updated scenarios for the future of road transport. The Economic Transition Scenario describes how current techno-economic trends are expected to drive the EV transition, while the Net Zero Scenario explores a path to a zero-emission global road fleet by 2050.
The report covers various aspects of EV adoption, including passenger vehicles, commercial vans and trucks, two- and three-wheelers, and buses globally. It also examines other drivetrains, such as hybrids, natural gas, and fuel cells, and their impacts on electricity markets, oil demand, battery materials, charging infrastructure, and CO2 emissions.
Key findings include the real but uneven slowdown in EV sales growth. While countries like China, India, and France show healthy growth, markets like Germany, Italy, and the US are more concerned. Japan’s market is held back by a lack of commitment from domestic automakers and the absence of new models in the mini-car segment. Despite the slowdown, the global growth rate in 2024 aligns with BNEF’s previous forecasts.
Automakers are adjusting their electrification targets, with some softening their goals due to challenges in manufacturing EVs at lower costs compared to ICE vehicles. Nonetheless, certain automakers are achieving significant results. For example, Kia aims to sell 1.6 million all-electric vehicles by 2030, and Volvo saw a 53% increase in global sales of electrified models in April 2024.
Global passenger EV sales are expected to continue growing, albeit at a slower rate. Sales are projected to rise from 13.9 million in 2023 to over 30 million in 2027. The EV share of global new passenger vehicle sales is expected to increase to 33% by 2027, with China and Europe leading the way. In the US, EV market jitters and the upcoming presidential elections have slowed adoption, with only 29% of cars sold in the country expected to be electric by 2027. Japan significantly lags behind other wealthy countries.
Overall, the long-term outlook for EVs remains positive despite near-term challenges. Improving EV economics underpin continued growth, with EVs projected to reach 45% of global passenger-vehicle sales by 2030 and 73% by 2040. However, a stronger regulatory push is needed in emerging markets to bridge the gap with more developed EV markets. The transition to a fully electric global fleet will require massive investments in the battery supply chain, charging infrastructure, and grid upgrades.
