- Battery electric vehicles in China are projected to exceed 50% of total sales by 2030, two years early.
- US and Europe face EV sales plateau due to affordability, infrastructure issues, and economic uncertainty, despite optimistic long-term forecasts.
- Steady growth expected in US and Europe with better infrastructure and regulations, while China’s EV market rapidly expands.
The US and Europe is falling behind EV adoption, while China appears ahead of schedule
According to EY analysis, China’s electric vehicle (EV) market is poised for significant growth, with battery electric vehicles (BEVs) set to account for more than 50% of sales by 2030. This projection is two years ahead of previous forecasts and contrasts with trends in the US and Europe. EV demand and sales are slowly levelling off in these regions.
According to Martin Cardell, EY Global Mobility Solutions Leader, global uncertainties are impacting the EV market:
“The current global EV marketplace is mired with a lot of uncertainty around economic prospects, varying regulations across markets, consumer anxiety and lagging infrastructure build-up. The result has been a plateau in EV sales in the US and Europe. Meanwhile, in China – where is there is more certainty in regulation, incentives and infrastructure – we continue to see steady EV growth and we expect to see BEVs become the majority vehicle type two years earlier than previously predicted. We view the current headwinds that EV sales are experiencing in the US and Europe as short-term in nature. The buildup of charging infrastructure, availability of affordable EV models with a fall in battery prices combined with government regulations will drive sustainable BEV growth in the long run.”
In the US, several factors are contributing to the plateau.
Affordability concerns, inadequate infrastructure, and a short-term shift towards hybrid vehicles are key issues. High interest rates and economic uncertainty further complicate the market, leading to a slowdown in EV sales. This slowdown is anticipated to stabilise in the near term, but it highlights significant challenges for the industry.
Europe is experiencing its own difficulties.
The reduction in EV incentives, a scarcity of affordable models, and insufficient charging infrastructure are slowing down sales. Despite these setbacks, long-term forecasts remain positive. The EY Mobility Lens Forecaster, an AI-powered tool, still predicts that BEVs will constitute 50% of sales by 2030 in Europe and by 2033 in the US. We’ve recently seen the EU pose tariffs on imported Chinese vehicles, which may slow down adoption even further by bottle-necking more affordable options.
Meanwhile, China continues to see steady growth in its EV market.
The Chinese market is supported by stable regulations, incentives, and infrastructure development. This growth should result in BEVs making up the majority of vehicle sales by 2030, earlier than previously anticipated.
The US might boost its EV sales through increased production of local vehicles and potential import restrictions on non-US products. The EU’s tariffs are coming into effect next month, however, the US has already hiked its tariffs up. Now, the country is banking on the development of a domestic supply chain, and rapid production of US-made vehicles, to boost adoption. Until then, we’re stuck in a lull where imported vehicles are too expensive to buy, but domestic vehicles aren’t being made quickly enough.
Martin Cardell continues:
“EVs are the future. Our numbers bear that out. Current challenges will be overcome by the industry and government, and EVs will regain momentum and will ultimately dominate the automotive market.”
While the US and Europe face immediate challenges, China’s EV market is on a path of continuous growth. Despite current obstacles, the long-term outlook for EVs remains promising. Global decarbonisation pledges dictate that EVs will gain significant market dominance in the future. For now, the global landscape is shifting towards domestic production and heavy regional protection. This has the potential to build stronger industries in the future, but for now, we’re waiting for the supply chain to pick up speed.
