Are global EV sales forecast to improve by the end of 2024?
25 November 2024
Will Europe’s sluggish electric vehicle (EV) market impact global deliveries in 2024? Neil King, head of forecasting at EV Volumes, presents the latest outlook with Autovista24 special content editor Phil Curry.
The global EV light-vehicle market is expected to perform well by the end of this year, according to the latest EV Volumes forecast. Despite a European slowdown, other markets will bolster deliveries of electric passenger cars and light-commercial vehicles. This will push the 2024 sales figure past 2023’s result.
EV registrations are forecast to improve by 19% worldwide, with 16.9 million sales and a 19.7% market share. This is 440,000 more units than predicted in July. However, the global EV volume outlook for 2028 onwards is up to 400,000 units lower than previously forecast. The global EV share is expected to reach 22.6% in 2025, 44.6% in 2030, and 69.5% in 2035.
The overall global light-vehicle market is expected to improve by 0.9% this year, up from the 0.5% forecast previously. This is due to the improved outlook for China compensating for the downgraded forecasts for Europe, Northern America, and the non-Triad region.
EV struggles in Europe
The entire European light-vehicle market saw a strong performance in 2023, with 13.9% growth in registrations. This came on the back of more turbulent times, caused by the COVID-19 pandemic and the resulting supply-chain crisis.
However, the market has struggled this year, with some bigger regions posting regular declines. Order intake is subdued because of high interest rates and cost-of-living increases, which have impacted demand.
EV Volumes now forecasts that the market will grow by only 2.4% this year. This figure is lower than the 2.6% forecast in July, highlighting how much the market has struggled in recent months.
This latest forecast equates to around 15.1 million units registered. This falls far short of the 18 million light vehicles delivered in Europe during 2019. EV Volumes does not see the European market returning to this level during the current forecast horizon, which runs to 2035.
Europe’s EV market has also struggled this so far year. With several countries amending or cancelling their subsidy programmes, a naturalisation of the sector has occurred.
Europe’s light-vehicle EV market can be expected to drop by the end of 2024, with deliveries down 2.2% compared to last year. This will only be a temporary downturn, with growth of 22.8% forecast for 2025, then a 20.1% rise in 2026 and an improvement of 21.1% in 2027.
The technology is forecast to dominate the market by 2029, representing 50.1% of all light-vehicle registrations. By 2030, there will be over 10 million EVs sold in Europe, with the technology taking 61% of the market.
PHEVs popular in China
China’s EV boom continued in 2022 with the powertrain’s share hitting 26.7% up from 13.9% in 2021. The government set a target for new energy vehicles (NEVs) sales, including battery-electric vehicles (BEVs), plug-in hybrids (PHEVs) and fuel-cell electric vehicles. These powertrains had to make up 20% of deliveries by 2025, a target which was reached three years ahead of time.
EV Volumes has slightly increased the total light-vehicle market forecast again for 2024. It now expects 24.5 million units to be sold. However, this still equates to a 1.3% year-on-year decline.
The market’s swing towards PHEVs, from 18.3% of all EVs sold in 2021 to 24.6% in 2022, continued last year. PHEVs accounted for 32.1% of EV registrations in 2023. This was largely caused by high sales growth of extended-range EVs (EREVs), popularised by BYD and Li Auto.
As a result, other Chinese OEMs have begun rolling out new PHEVs, which will exacerbate their appeal. Therefore, EV Volumes forecasts that the technology will capture a 41.6% share of the EV mix in 2024.
The country’s government is planning to provide additional financial support to encourage the adoption of cleaner technology, including EVs. Therefore, EV Volumes has increased the EV share outlook across the forecast horizon. It expects BEVs to gain ground in the BEV-PHEV mix from 2025 onwards.
In the medium and long term, the local forecast is not restricted by target shares or capacity limitations. EVs are forecast to account for 47.8% of light-vehicle sales in 2025, 69.5% in 2030, and 85% in 2035.
Support in North America?
EV growth in North America has proved consistent over the last two years. The entire market improved by 47.6% in 2022, and 47.8% in 2023. The EV share of all light-vehicle sales also improved in 2023 to 9.4%, up from 7.2% in 2022.
The country’s overall automotive market recovery is expected to continue. However, this will be at a slightly slower pace than anticipated earlier this year. This has affected the EV market share and volume forecasts. In 2024, a 12.8% improvement in light-vehicle EV registrations is expected, followed by a 37.8% increase in 2025.
The Inflation Reduction Act (IRA) supports further, rapid EV growth in the US. However, compliance with upcoming battery and material-sourcing requirements is still unclear for many EV entries.
The incentives for producing vehicles and batteries in the region remain strong while also threatening imported brands and models. However, the Union of Auto Workers strikes highlighted the risks that EVs may pose to domestic OEMs. In turn, this would hurt US jobs in the automotive sector.
The IRA is assumed to remain effective until 2032. However, this could change when Donald Trump takes to the Oval Office at the start of 2025. Based on existing data, EV Volumes currently forecasts that the EV share of light-vehicle sales will reach 10.3% in 2024. This will then increase to 13.5% in 2025, then 39.7% in 2030, and 71.8% in 2035.
BEVs are expected to account for 78.6% of US EV sales this year, down from 79.7% in 2023. However, this figure will rise to 82.4% in 2025, then 93.6% in 2030, and 97.2% in 2035.
Non-Triad holds firm
EV numbers in the non-Triad markets rose sharply for the third consecutive year in 2023, albeit from a low base. EV demand is increasingly supported by a wider availability of products, higher incentives, and lower import tariffs in some countries.
Combined EV sales in the non-Triad markets reached roughly 556,000 units in 2022 and exceeded one million units for the first time in 2023. This equated to respective growth of 90.9% and 81.7%.
Volumes grew by more than 100% in markets including Australia, Thailand, Brazil, Turkey, Malaysia, and Mexico in 2023 and more than 50% in India and Japan.
Despite this, the combined EV share in the non-Triad region was only 3.6% in 2023. This was up from 2.1% in 2022, as large vehicle markets like India, Japan, Brazil, and Mexico still sell very few EVs. This also pulled down the global average EV share, as non-Triad countries accounted for a third of global light-vehicle sales in 2023.
The growth forecast for the region’s overall light vehicles in 2024 has been lowered to only 0.7% due to weakness in countries including Japan and South Korea. However, governments are introducing measures to strengthen their currencies and stimulate consumer demand, which should support vehicle sales going forward.
Therefore, EV Volumes has held the 2024 EV share forecast for the non-Triad countries at 4.8%, which translates into 1.37 million EV sales. Although, PHEVs are expected to perform better in the plug-in mix than previously anticipated.
The EV share is predicted to rise to 6.4% in 2025, reaching 17.7% in 2030, and 42.5% in 2035. This means the region will trail global EV adoption by about six years.
Future EV volume surge
The global volume of EVs is set to rise from just under 14.2 million units in 2023 to 71.2 million units in 2035. The latter figure is five times the amount of 2023’s volume.
Meanwhile, annual traction battery demand is forecast to increase from 0.7 terawatt hours (TWh) in 2023 to 5.1TWh in 2035. This is over seven times the 2023 total. This is driven by the quest for longer electric ranges in all vehicle segments. The electrification of the popular full-size SUVs and pickups in North America is also increasing demand.
However, the trend for larger batteries is slowing as efficiency increases. Lower costs facilitate the electrification of smaller vehicles, where profit margins are tighter.
The number of EVs in operation is also increasing rapidly. However, their share of the total light-vehicle fleet is developing with considerable delay. There are a total of 1.33 billion light vehicles on roads around the world today.
Yet, EV Volumes' current forecast for plug-in growth expects that it will take until 2042 for half of the global fleet to be electric. This was calculated assuming normal scrappage rates.
