Global electric vehicle (EV) sales are projected to grow by 21% in 2024 and 19% in 2025, marking a slowdown from the 31% growth in 2023 and 60% in 2022, according to ABI Research.
This deceleration in the EV market is not attributed to the often-cited reasons of charger shortages or limited vehicle ranges, which are improving, but rather to other regional-specific trends and market dynamics.
In Europe, the decrease in EV sales growth, particularly in Germany and the United Kingdom, is linked to the withdrawal of government subsidies.
These two countries are key markets in Europe and their trends significantly influence the overall European narrative.
Despite this, two-thirds of European countries actually experienced higher growth in 2023 compared to the previous year. In the United States, the slowdown is partly due to an overreliance on Tesla and a shrinking pool of early adopters as the market shifts towards mass adoption.
Conversely, China exhibits a robust growth trajectory in the EV sector, achieving a 36% market share in 2023 with expectations to exceed 50% by 2025.
The success in China is driven by companies like BYD, which have managed to lower the costs of EVs to match or even undercut those of internal combustion engine vehicles.
This price competitiveness has helped propel the EV market in China without the need for government subsidies.
The analysis by ABI Research highlights that the global slowdown in EV sales can be overcome if automakers in Europe and North America can produce a range of attractive, competitively priced EVs.
This may become more feasible with the anticipated operation of new battery gigafactories and the introduction of more EV models in the latter part of the decade.
The findings stress that the example set by China demonstrates that favourable pricing can significantly influence consumer adoption rates.
The report is part of ABI Research’s Electric Vehicles research service and is based on extensive primary interviews, providing in-depth analysis of key market trends.
