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Global Trends and Market Dynamics in the Electric Vehicle Industry in 2024

GOOVER DAILY REPORT July 26, 2024
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TABLE OF CONTENTS

  1. Summary
  2. Electric Vehicle Registrations and Market Trends
  3. Policies and Regulations Impacting the EV Market
  4. Technological Advancements in EVs
  5. Regional Market Analysis
  6. Competitive Landscape
  7. Challenges and Opportunities in the EV Market
  8. Conclusion

1. Summary

  • The report titled 'Global Trends and Market Dynamics in the Electric Vehicle Industry in 2024' provides a detailed analysis of the electric vehicle (EV) sector. It covers key aspects such as EV registrations, market trends, technological advancements, policies impacting the industry, and the competitive landscape. The report highlights fluctuations in EV registrations across different regions, with notable growth in emerging markets like India and Thailand. It also discusses battery innovations and features in high-performance and luxury EVs, emphasizing the importance of extended battery life and reduced charging times. Major companies such as Tesla, BYD, and Volkswagen Group are discussed in the context of their market shares and strategies. The influence of regulatory policies from the European Union and the United States on promoting EV adoption is also elaborated.

2. Electric Vehicle Registrations and Market Trends

  • 2-1. Decline and Growth in EU EV Registrations

  • New registrations of electric cars in the EU experienced a slight dip in June, with a 1% decline compared to the same month last year, totaling 156,408 units, according to the European Automobile Manufacturers' Association (ACEA). Despite the overall decline, certain countries showed significant growth. Croatia saw an impressive increase of 161.4%, registering 298 new battery-electric vehicles (BEVs). Similarly, Czechia and Hungary registered annual increases of 140.8% and 123.8%, respectively, with 1,524 and 864 new registrations. In contrast, Germany registered a notable number of BEVs at 43,412 units, with France and Belgium following at 29,837 and 13,714 units respectively. Some countries experienced a decline in registrations, including Ireland (-52.2%), Romania (-45.3%), Latvia (-42.5%), and Lithuania (-42.0%).

  • 2-2. Battery Electric Vehicle Market Share

  • In June, the market share of battery electric vehicles (BEVs) in the EU declined from 15.1% to 14.4% compared to the same month a year earlier. Despite this marginal drop in market share, the overall growth trend in the electric vehicle market remains strong. Notable growth in BEV registrations was seen in Italy (+117.4%) and Belgium (+50.4%), while Germany and the Netherlands witnessed declines of 18.1% and 15% respectively. The robust performance in countries with stable EV incentives indicates the significant impact government policies can have on market dynamics.

  • 2-3. Petrol vs Electric Car Sales Trends

  • Petrol car sales remained relatively stable in June, with a slight decline of 0.7%. Countries like France and Spain saw decreases of 20.2% and 7.5%, respectively, while Germany and Italy experienced growth in petrol car registrations by 12.1% and 6.9%. Consequently, petrol cars held 34.4% of the market share, down from 36.2% the previous year. This contrasts with the electric vehicle market, where despite a one-time dip in registrations, the long-term growth trend points to increasing EV adoption. Volkswagen Group dominated overall vehicle sales, capturing 25.8% of the market, followed by Stellantis at 15.7% and the Renault Group at 10.9%.

3. Policies and Regulations Impacting the EV Market

  • 3-1. Phase-Out of Fossil Fuel Vehicles

  • Various countries around the world are moving towards phasing out fossil fuel vehicles through proposed bans or discouraging measures such as taxes. These bans, often referred to as "banning gas cars" or "the diesel ban," can include prohibitions on the sale of new fossil-fuel-powered vehicles or the use of existing ones, and the creation of zero-emission zones in cities. Countries like Norway have implemented consumer incentives resulting in a majority of new vehicle sales being electric. Another method is imposing restrictions on fossil fuel vehicles during specific times or smog alerts. The general intention behind these phases is to reduce health risks from pollution, meet national greenhouse gas emissions targets, and achieve energy independence. Despite opposition to moving entirely to electric cars due to space requirements, measures to encourage cycling and walking as alternative short-distance transportation are being encouraged.

  • 3-2. US and EU Policies on EV Supply Chains and Tariffs

  • The US has implemented policies to diversify EV supply chains and prevent products manufactured using forced labor, such as the Uyghur Forced Labor Prevention Act which came into effect in June 2022. In May 2024, the Biden administration increased tariffs on imported Chinese EVs from 25% to 100% to protect the American market from cheaper Chinese EVs. Similarly, the EU is promoting domestic battery cell manufacturing through the European Battery Alliance and has proposed the Critical Raw Materials Act to diversify and secure a sustainable supply of critical minerals. The EU also imposed additional tariffs of up to 38.1% on Chinese EV imports due to concerns about state subsidies that allow Chinese EVs to be sold at unfairly low prices, which could distort the EU market. These strategies reflect joint efforts to build and sustain competitive supply chains while minimizing dependency on foreign markets.

  • 3-3. Incentives for Electric Vehicles in Various Countries

  • Countries across the globe have implemented various incentives to promote the adoption of electric vehicles. For instance, Norway offered significant consumer incentives, resulting in 88% of new vehicles sold in January 2022 being electric. Similar incentives include subsidies, tax breaks, and the creation of low-emission and zero-emission zones in urban areas. Countries participating in international agreements such as the Glasgow Declaration aim to achieve 100% zero-emission vehicle sales by 2040 at the latest. Governments have used these measures to stimulate the electric vehicle market by making fossil-fuel vehicles less economically attractive through higher taxes and restricted utility while encouraging the purchase and usage of electric vehicles.

4. Technological Advancements in EVs

  • 4-1. Battery Innovations

  • Recent developments in battery technology have been notable for their focus on extended battery life and reduced charging times. User experiences with the Tesla Model Y in Australia illustrate these advancements, particularly the reliability of the battery over extended periods with minimal service issues. Home charging via Tesla's mobile charger has become more viable and cost-effective, with public chargers available for longer trips. This dual charging strategy emphasizes the shift toward enabling economic and efficient home charging while maintaining fast public charging options.

  • 4-2. High-Performance and Luxury EVs

  • High-performance and luxury EVs are making significant technological strides, showcasing cutting-edge features and remarkable performance metrics. For instance, the Tesla Model X Plaid, a significant player in this category, boasts a tri-motor setup generating 1,020 horsepower with a 0-60 mph time of 2.5 seconds. Similarly, the BMW i4 M50, discontinued in 2024, provided 536 horsepower and could accelerate from 0-60 mph in 3.7 seconds. Both models exhibit how advancements in electric motors and drivetrain configurations (like BMW's xDrive system) are pushing the boundaries of vehicle performance and consumer appeal in the high-end market.

  • 4-3. Technological Features in Modern EVs

  • Modern electric vehicles are packed with innovative features enhancing both safety and convenience. Augmented Reality (AR) dashboards are among the top new technologies, projecting critical driving information onto the windshield. Advanced Driver-Assistance Systems (ADAS), supported by LiDAR technology, significantly improve safety with lane-keeping, adaptive cruise control, and automatic emergency braking. Vehicles like the Tesla Model Y integrate sophisticated user-friendly features such as the Tesla Mobile App, which offers remote vehicle control and detailed safety features like real-time tire pressure monitoring. Additionally, over-the-air (OTA) software updates from Tesla and other manufacturers ensure that vehicles remain up-to-date with the latest technologies and security improvements without needing dealership visits.

5. Regional Market Analysis

  • 5-1. China's Dominance in the EV Market

  • China has firmly established itself as the leading market for electric vehicles (EVs). In 2023, nearly 60% of global electric car registrations were in China, amounting to 8.1 million new registrations, which was a 35% increase from the previous year. This surge in EV registrations was a key factor in the overall growth of the car market in China, despite a reduction in sales for conventional internal combustion engine vehicles. China also became the largest exporter of cars in 2023, exporting over 4 million vehicles, including 1.2 million EVs. This marked a significant increase from the previous year, with car exports increasing by almost 65% and electric car exports rising by 80%. The primary export markets for these vehicles included Europe and countries in the Asia Pacific region. Although the national subsidies for EV purchases ended, tax exemptions and province-led support continued to play important roles. As the market matures, price competition and consolidation are expected to define the industry landscape.

  • 5-2. Growth in Emerging Markets

  • Electric car sales in emerging markets showed significant growth, albeit from a lower base compared to developed regions. In India, EV registrations increased by 70% year-on-year to 80,000 in 2023, driven by incentives such as the FAME II scheme. Thailand also saw a dramatic increase in electric car registrations, which more than quadrupled to nearly 90,000, reaching a notable 10% market share. This was supported by subsidies, lower taxes, and the entry of Chinese carmakers like BYD. In Viet Nam, car sales contracted by 25% overall in 2023, but electric car sales skyrocketed to over 30,000 from just 7,000 in the previous year, driven primarily by domestic company VinFast. Other regions such as Brazil, Colombia, Costa Rica, and Mexico also saw increased EV adoption, with sales close to 90,000 in Latin America in 2023.

  • 5-3. EV Market Dynamics in the USA and Europe

  • In the United States, new electric car registrations totalled 1.4 million in 2023, which was a more than 40% increase compared to 2022. While the annual growth rate was slower compared to the previous two years, demand for EVs remained strong. The Inflation Reduction Act (IRA) played a crucial role by revising qualifications for the Clean Vehicle Tax Credit, making several EV models eligible for significant tax benefits. In Europe, new electric car registrations reached nearly 3.2 million in 2023, reflecting an almost 20% increase. Significant milestones were achieved in several countries, including Germany, where battery electric car registrations reached 500,000 in a single year. However, the phase-out of subsidies in Germany caused a slowdown in overall EV sales growth. Conversely, sales shares increased in countries like France, the United Kingdom, the Netherlands, and Sweden. European manufacturers continue to face challenges related to the production of affordable electric vehicles, with many preferring to invest in high-performance, resource-intensive models. The reluctance to produce low-cost urban runabouts has prevented the full potential of EV market penetration, impacting overall growth targets.

6. Competitive Landscape

  • 6-1. Market Share of Leading EV Manufacturers

  • The Market Share of Leading EV Manufacturers has experienced notable shifts in recent times. As of recent estimates, Tesla’s market share in the U.S. electric vehicle market has slipped below 50% for the first time, dropping to 49.7% from 59.3% in the previous year. This decline is attributed to the increasing competition from established carmakers like General Motors, Ford, Hyundai, and Kia. These competitors have been introducing electric vehicles with enhanced capabilities that rival Tesla’s, leading to their increased market presence.

  • 6-2. BYD's Position in the Global EV Market

  • BYD has solidified its standing in the global electric vehicle market through significant growth and strategic advancements. China, where BYD is based, saw total electric car registrations reach 8.1 million in 2023, marking a 35% increase from the previous year. The company has played a crucial role in this growth and has also expanded its influence through exports. In 2023, China exported over 4 million cars, 1.2 million of which were electric vehicles, making China the largest auto exporter worldwide. BYD’s influence is particularly strong in emerging markets such as Thailand and Brazil, where it has successfully rolled out various models and is establishing production facilities to boost local manufacturing.

  • 6-3. Tesla's Market Dynamics

  • Tesla has been facing increased competition which has impacted its market dynamics. Although U.S. electric vehicle sales increased by 11.3% year-over-year, Tesla's share decreased to 49.7% in the second quarter, down from 59.3%. The heightened competition from companies like General Motors and Ford, which are offering new electric vehicle models and leveraging extensive dealer networks, has put pressure on Tesla. Additionally, Tesla's own sales have been affected by an aging vehicle lineup, with popular models like the Model Y becoming dated by industry standards. Despite these challenges, consumer demand for electric vehicles remains robust, and overall U.S. electric vehicle sales have surged to record levels.

7. Challenges and Opportunities in the EV Market

  • 7-1. Import Tariffs and Their Impact

  • Europe and other regions have implemented significant import tariffs on Chinese-made electric vehicles (EVs). In June 2024, the European Commission imposed tariffs of up to 38% on Chinese EVs, citing unfair state subsidization that threatened local manufacturers economically. This decision followed preliminary findings in 2023, which suggested tariffs of 50% would be necessary to affect Chinese exporters substantially. The United States also increased tariffs to 100%, while Turkey imposed a 40% or $7,000 minimum per-car tariff on all vehicles made in China. Other countries, including Brazil and South Africa, have also phased in or maintained high tariffs on imported EVs. These tariffs have led to several Chinese automakers planning to move production to target markets such as Hungary (for Europe), Brazil, and potentially South Africa, indicating complex shifts in global manufacturing patterns.

  • 7-2. Challenges in Achieving EV Sales Targets

  • The European Union and the UK have set ambitious targets for electric vehicle (EV) sales, aiming for 80% of new sedan and SUV sales to be electric by 2030 and a complete transition by 2035. However, current forecasts suggest these targets are unlikely to be met. As of now, European EV sales stand at an annual rate of just over 2 million, representing less than 20% market share. Forecasts by UBS and Jefferies adjust these figures to 8.3 million (50% market share) and 6.8 million (50% market share) by 2030, respectively. Furthermore, British government targets an EV sales quota of 22% by 2024, yet sales are hovering around 17%. The reluctance of European manufacturers to produce affordable, mass-market EVs further complicates achieving these targets, as current offerings remain expensive and beyond the reach of average consumers.

  • 7-3. Opportunities in EV Supply Chain Innovations

  • Despite the challenges, there are significant opportunities in the EV supply chain. Chinese companies are adapting to the new global competitive landscape by establishing manufacturing facilities in target markets such as Hungary and Brazil. For Europe, this could potentially mean an influx of affordable EV models, filling the gap for low-cost, mass-market vehicles that European manufacturers are hesitant to produce. This shift also acknowledges the role of China in advancing EV technology and innovation, making strategic partnerships and joint ventures a viable solution for European firms. Additionally, some EV makers like XPeng are exploring ways to minimize the impact of tariffs on consumers without altering their international strategy, highlighting the adaptability and resilience within the industry.

8. Conclusion

  • In conclusion, the electric vehicle industry is experiencing significant growth driven by technological advancements and government policies aimed at promoting sustainability. Companies like Tesla and BYD are leading the charge with innovative technologies and expanding market shares. However, the industry faces substantial challenges including high import tariffs and the struggle to meet ambitious EV sales targets set by entities like the European Union. While the EV market continues to grow, manufacturers need to focus on producing affordable, mass-market vehicles to fully realize market potential. Future prospects appear promising with continued innovation in battery technology and strategic policies providing a robust framework for further growth. The insights derived from this report underscore the critical role of continuous innovation and strategic adaptation in overcoming existing challenges and capitalizing on emerging opportunities within the rapidly evolving electric vehicle landscape.

9. Glossary

  • 9-1. Volkswagen Group [Company]

  • A leading automotive company with a 25.8% market share in the EU's electric vehicle registrations. Volkswagen is pivotal in the EV market, driving innovation and market penetration.

  • 9-2. BYD [Company]

  • A major Chinese electric vehicle manufacturer known for its extensive experience and technological innovations. BYD is rapidly gaining market share in Europe and is known for its Blade battery technology.

  • 9-3. Tesla [Company]

  • An American electric vehicle manufacturer that has revolutionized the market with its self-sufficient supply chain and innovative products. Tesla leads in global EV sales but faces increasing competition.

  • 9-4. Battery Electric Vehicles (BEVs) [Technology]

  • Electric vehicles powered entirely by electrical energy stored in batteries, representing a growing share of the global automotive market. They are central to reducing emissions and reliance on fossil fuels.

  • 9-5. European Union (EU) [Entity]

  • A political and economic union of 27 member states with significant policies impacting the EV market, including tariffs on Chinese EVs and regulations for phasing out fossil fuel vehicles.

10. Source Documents