The International Energy Agency (IEA) predicts that sales of electric and plug-in hybrid cars will reach a new global record in 2024 at 17 million units, reflecting a growth of over 20% compared to 2023. The IEA also forecasts that most electric cars will be priced similarly to petrol equivalents by 2030 as prices continue to decrease. Tesla recently lowered prices to compete against Chinese rivals like BYD, the largest producer of battery electric cars. While some carmakers are offering discounts due to slowing demand for electric cars, lower prices are expected to accelerate the transition to electric vehicles.
Despite variations in sales across different countries, there is clear momentum for transitioning to electric vehicles globally according to IEA head Fatih Birol. The investment in battery manufacturing indicates that the supply chain is ready to meet the growing demand for electric cars. In the first quarter of 2024, electric and plug-in hybrids outsold the total of 2020, reflecting the increasing popularity of these vehicles. Some countries, like Norway, have been successful in encouraging electric vehicle adoption, but policies vary widely across the world, with China and richer European countries leading the way.
In Europe, the UK has emerged as the biggest electric car market in the first three months of 2023, surpassing countries like Germany. However, the timing of the adoption of electric cars in Europe is influenced by regulations as carmakers aim to balance profits from petrol and diesel models while meeting emission standards. German sales are suffering due to subsidy cuts and manufacturers strategically delaying sales until 2025 to comply with stricter CO2 emission rules. This delay might provide an opportunity for Chinese manufacturers to gain a stronghold in the market before traditional manufacturers ramp up their electric vehicle offerings in 2025.
In the UK, the government removed subsidies for privately bought electric cars in 2022, reflecting a change in policy that could impact the adoption of electric vehicles. The Society of Motor Manufacturers and Traders has raised concerns about the separate grants for zero-emissions lorries, noting that the certification process for zero-emission trucks is lengthy and inefficient, leading to underutilization of the grants. The push for electric vehicles is gaining momentum globally, with varying levels of success in different regions and evolving government policies influencing the transition.
