In 2023 China EV Witnessed 35% Rise YoY: Rystad

In 2023 China EV Witness 35% Rise YoY, As US and EU Struggle: Rystad

Rystad, an energy research and business intelligence company recently shared insights on the ongoing trend in the electric vehicle (EV) market in 2024. According to the Rystad report, “The electric vehicle (EV) market is on track in 2024 as emissions reduction targets clash with falling consumer spending amid enduring economic uncertainty.” Rystad Energy research forecasts, “17.5 million EV sales this year, an 18.5% annual increase, as a result, the share of new car sales that are either battery electric (BEV) or plug-in hybrid electric vehicles (PHEV) are estimated to increase from 19.2% in 2023 to around 21.8% at the end of 2024.”

It anticipates, “China can play a significant role in the market’s continued expansion thanks to sizeable growth in its domestic production. We expect about 11.5 million new EVs will be sold in the country this year, a 44% share of all new car sales.”

It further adds, “China is dominant in the global EV sector, accounting for 69% of all new EV sales in December, and continued growth is on the cards. Last year saw a 37% annual growth in sales, with approximately 9 million new EVs sold and a market share of 34%. The country has also advanced its EV penetration targets, aiming for a 45% market share by 2027, an increase from the originally planned 40% by 2030. With local players continuing consolidation, this strategic move opens a critical window for non-Chinese automakers struggling to gain a foothold in its booming EV market.”

It further added, “Closing 2023 with 26.5 million passenger cars sold, China saw a 10.8% increase from 2022. December marked another milestone, with EVs achieving a record-breaking month of sales at 1.13 million units—a 16% surge from November and a 50% annual increase. BEVs accounted for 27.6% of car sales for the month and 40% of all sales.”

It added, “Outside of China, the EV landscape looks notably different. In Europe, market penetration is expected to grow, albeit slower than observed in prior years, at 3.3 million units this year. The US EV market suffered a lackluster 2023, with uncertainty surrounding tax credits and interest rates complicating consumer decisions to switch to an electric vehicle.”

PHEVs Show Promise, But Long-Term Viability In Question

It explained, “The number of passenger cars, or light vehicles, sold in 2023 increased by 10% from 2022. Growing economies and typically slower markets, such as Australia, India and Malaysia, drove this unexpected surge. This overall growth fueled an uptick in EV deliveries in 2023, with about 14.3 million EV sales globally, a 35% increase compared to 2022.”

It said, “Recent sales figures for BEVs versus PHEVs are an interesting look at the market dynamics – BEV sales are growing consistently, but PHEVs remain resilient. This is especially evident in the US in the second of 2023, where consumer preference has shifted to PHEVs.”

It further said, “The rise in the sales of these battery-hybrid cars could underscore their role as a transitionary technology in phasing out internal combustion engine (ICE) vehicles to meet decarbonization targets. However, the future of the market depends heavily on the same factors impacting the BEV market: technological advancements, infrastructure support and range considerations.”

Rystad explained, “Looking specifically at activity in a manufacturing setting, Tesla celebrated a notable fourth quarter, achieving a record 484,500 EV deliveries, marking a solid recovery from a third-quarter slowdown. The growth was primarily driven by robust performances across all models, though an increase in Model 3 and Y sales has come on the back of price cuts for both models. The Model S, Model X and Cybertruck deliveries grew by nearly 50% year-on-year.”

However, Tesla CEO Elon Musk has voiced concerns about sustaining this growth into 2024. Musk also emphasized the company’s focus on constructing a factory in Mexico but acknowledged potential delays as the company prioritizes refining the Model 2 development in Austin, Texas, before expanding production south of the border.

It elaborated, “BYD, a major Chinese manufacturer, emerged as the largest EV automaker in 2023, surpassing Tesla in BEV deliveries, particularly during the fourth quarter. The brand sold more than 942,000 EVs in the final quarter of 2023 and a total of 3 million EVs annually.”

It said, “While BYD fell short of its initial 4-million target, its performance remained within the forecast range of 2.75 million sales. To meet sales targets, BYD incentivized dealers with up to $93 per car sold, amounting to a significant expenditure of 1.5 billion yuan ($211 million). Looking ahead, BYD seems set to maintain its growth trajectory and is optimistic about reaching the 4-million target set for the upcoming year.”