Green Forum • 6 June, 2024 at 8:10 AM
The latest EY Mobility Lens Forecaster, an AI-powered tool predicting light vehicle registration volumes through 2050, indicates that the US and Europe will face slowing demand and sales for electric vehicles (EVs) in the near term, while China is set to see steady growth.
In the US, high interest rates, insufficient charging infrastructure, and uncertain economic conditions have heightened concerns about affordability and range, leading to a slowdown in EV sales, though this is expected to stabilize soon. Europe is similarly affected by high prices, economic uncertainty, and inadequate infrastructure, which are slowing EV adoption. In contrast, China is projected to continue its growth trajectory, with battery electric vehicles (BEVs) expected to comprise more than 50% of all sales by 2030—two years earlier than previous forecasts suggested. Despite the current slowdown in the US and Europe, long-term projections remain unchanged, anticipating BEVs will make up 50% of sales by 2030 in Europe and by 2033 in the US.
Even with delayed government targets and uncertain EV policies beyond the upcoming US presidential election, the optimistic outlook for the US predicts that locally produced EVs will boost sales, supported by import restrictions on non-US manufactured products. Conversely, Chinese automakers will face tightening trade policies from the EU and US, imposing stricter sanctions on EV imports, which could decrease Chinese export sales. This would compel Chinese EV manufacturers to contend with high tariff barriers and reassess their expansion strategies.
"The global EV market is currently clouded by economic uncertainties, varying regulations, consumer anxiety, and lagging infrastructure development. This has resulted in a plateau in EV sales in the US and Europe. However, in China—where regulations, incentives, and infrastructure are more predictable—we continue to see steady EV growth, with BEVs expected to become the dominant vehicle type two years earlier than previously predicted. We view the current challenges in EV sales in the US and Europe as short-term. The expansion of charging infrastructure, availability of affordable EV models, falling battery prices, and supportive government regulations will drive sustainable BEV growth in the long run. "EVs are the future. Our data supports this. The current challenges will be overcome by the industry and government, and EVs will regain momentum to ultimately dominate the automotive market”, said. Martin Cardell, EY Global Mobility Solutions Leader.