The global electric vehicle (EV) market is witnessing a deceleration in growth rate, according to a recent analysis by Goldman Sachs, and we will see the causes and give the regional insights.
The investment firm has identified a litany of contributing factors for this slowdown, including high capital costs, election uncertainties, and a shortage of rapid-charging infrastructure.
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| Electric vehicle sales seem to be declining in the US and Europe but surging in India. |
US EV market trends
Kelley Blue Book, a leading vehicle valuation and automotive research company, said that over 200,000 new electric vehicles were sold in the United States during the first quarter of 2024.
These US sales were only 7.3 per cent of all new car sales, indicating a decline from the fourth quarter of 2023.
While there has been a year-on-year (YoY) sales increase of 2.6 per cent in Q1 2024, the growth rate is lower compared to the previous years.
The drop from Q4 of 2023 was significant, at 15.2 per cent, showing a cooling trend in the market. This deceleration is in sharp contrast to the robust growth witnessed during the past two years.
European EV market scenario
The European market is also showing signs of a slowdown. The European Automobile Manufacturers’ Association (ACEA) reported a decline in new car sales in March 2024, marking the first monthly fall this year.
This plunge is primarily attributed to a decrease in EV registrations and the timing of the Easter holidays.
In the European Union, new electric vehicle sales fell by 11.3 per cent to 134,397 units in March.
The downturn was most pronounced in Germany, Europe’s largest EV market, where sales plummeted by 29 per cent.
Rising hybrid vehicle sales
Despite the overall sluggish demand for EVs, sales of hybrid electric vehicles (HEVs) and plug-in hybrid electric vehicles (PHEVs) are on the rise.
In the US, these vehicles have shown stronger growth rates compared to fully electric vehicles over the past few months.
India’s booming EV market
In contrast to the global trend, India is experiencing a surge in EV sales. According to JMK Research & Analytics, the Indian market saw sales surpass 1.7 million units in the financial year 2023-24 (FY24).
This robust growth underscores India’s expanding EV market, which is rapidly outpacing other regions.
India’s passenger vehicle sales increased by 10 per cent YoY in 2023, with EV sales more than doubling to account for 2 per cent of total passenger vehicle sales.
Counterpoint Research, a market analytics firm, projects that EV sales in India will rise by 66 per cent in 2024.
This growth is expected to double the EV market share in the passenger car segment from 2 per cent to 4 per cent by the end of the year.
Furthermore, EV sales are seen to constitute one-third of all passenger vehicle sales in India in the coming (probably five) years.
E-Vroooom’s views
The slowing growth rate of global EV sales highlights several challenges, including high costs, infrastructure issues and market uncertainties.
However, regional variations exist, with hybrid vehicles gaining traction in the US and Europe, and India emerging as a strong growth market for EVs.
Slowing global electric vehicle sales can be prevented by enhancing charging infrastructure, reducing prices and costs, fostering favourable regulatory environments and tracking these trends and regional insights will be essential for stakeholders aiming to capitalise on the growing demand for sustainable transportation solutions.
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