Carmakers gear up for EV market growth

The global electric vehicle (EV) market is set to witness a substantial growth of 29 per cent, reaching 13.7 million units in 2023, according to the latest research from technology market analysts Canalys.

This surge would equate to an impressive 17.1 per cent penetration rate. Canalys predicts China to maintain its position as the largest EV market, shipping 7.6 million units and commanding a substantial 55.5 per cent market share.

Moreover, Canalys forecasts the global EV market to experience a remarkable 27.1 per cent growth in 2024, reaching a total of 17.5 million units.

Additionally, China is expected to lead the way in terms of the final figures for 2023, with Europe (3.2 million units) and North America (1.8 million units) following closely as the second and third largest markets, respectively.

To boost consumer demand, the report explained, car manufacturers are intensifying efforts in localising EV production.

They are tailoring EV models to fit specific regions and markets, while also enhancing the overall EV user experience by developing charging infrastructure and intelligent services ecosystems.

Despite the positive outlook, carmakers face challenges related to cost-effectiveness and subsidy reductions. Addressing these issues is crucial for sustained growth in the EV sector.

With the Chinese government prioritising sustainable economic development and vehicle consumption, Canalys projects light vehicle sales in China to grow by 1 per cent in 2024, reaching 22.7 million units.

In this regard, EVs are expected to play a significant role, reaching 9.1 million units and constituting 40 per cent of total sales.

Reductions in battery costs are anticipated to further drive Battery Electric Vehicle (BEV) sales, particularly in the compact and subcompact vehicle market.

Plug-in Hybrid Electric Vehicles (PHEVs) are also expected to gain market share due to their cost-effectiveness and adaptability.

“Appealing new EVs were launched at the end of 2023, setting the stage for 2024,” said Alvin Liu, Analyst at Canalys.

“EVs are the core growth driver for the vehicle market in China,” Liu added, noting that “EVs from Chinese carmakers, which are expected to take up 78 per cent of the market in 2024, are pulling ahead, widening the user experience gap compared to internal combustion engine (ICE) vehicles”.

Furthermore, Liu explained that “the latest battery technologies and improving infrastructure address charging anxiety”.

The Canalys analyst mentioned that the creation of various charging ecosystems, referencing NIO’s Battery Swap Alliance as an example, along with Mercedes-Benz and BMW’s Super Charging Network and Lotus’s Flash Charging Alliance, will further fuel the growth of BEVs’ market share.

“However, maintaining a growth rate of over 50 per cent this year is impossible as EVs have reached a critical mass and convincing the remaining EV sceptics will be a growing challenge,” Liu concluded.