The electric vehicle (EV) market has boosted demand for commodities such as lithium and cobalt in recent years, making EV sales a good metric for evaluating the battery metals landscape.
With those factors at play, what are the key electric vehicle trends to watch? Here the Investing News Network (INN) takes a look at what’s moving the EV market in 2024, as well as what’s on the horizon for the EV sector longer term.
However, taking a look at year-over-year shows that combined EV sales for the first two months of the year were actually up by 32 percent over the January/February period in 2023.
This growth isn’t even across the board, though. One of the key trends to watch in this year’s EV market landscape is the marked difference in growth trajectories for the three major regional markets.
China continues to lead the world in EV adoption rates, based on Rho Motion’s data. The Chinese EV market grew by 31 percent in the January to May period compared to 2023, compared to just 5 percent growth in North America (excluding Mexico) and 4 percent in Europe.
Looking at May alone, China’s sales were up 36 percent year-over-year. The numbers were not so hot for the other two key markets, which were down by 3 percent and 9 percent respectively.
These cheaper Chinese EV models pose a problem for the other two major auto markets, North America and Europe, which are already grappling with trying to grow their own domestic EV industries to challenge China’s overwhelming dominance in the global EV market.
“A surge of low-cost EV imports from China will undermine everything being done right now to rebuild and grow a strong and truly national auto industry,” Unifor President Lana Payne said.
“We will not launch a second-gen [EV] product unless it’s profitable within the first year and we are going to get a return on that capital we’re investing,” said Ford Chief Financial Officer John Lawler. This is telling, coming from the second best-selling EV brand in the US so far in 2024.
What’s in store for the rest of 2024? A lot of optimism still remains for the EV market for the remainder of the year.
“Electric cars continue to make progress towards becoming a mass-market product in a larger number of countries,” the IEA stated. “Tight margins, volatile battery metal prices, high inflation, and the phase-out of purchase incentives in some countries have sparked concerns about the industry’s pace of growth, but global sales data remain strong.”
Looking further out, the IEA expects that EVs will represent half of total global auto sales in 2035. That figure could increase to two-thirds if governments are able to meet all their energy and climate mandates on schedule.
Speeding up the adoption of EVs will also require automakers to bring more affordable models to market that are price competitive with their internal combustion engine equivalents. China is already doing well in this facet of the market; however, much ground needs to be covered in the North American and European markets, which are struggling with supply chain issues for EV battery metals as well as a lack of public charging infrastructure.
According to IEA estimates, more than 60 percent of electric vehicles sold in China last year were cheaper than their ICE counterparts. In Europe and the US, depending on the geographic location and the vehicle type, the agency reports that EVs are 10 percent to 50 percent more expensive than ICE vehicles. On the plus side, based on current trends, the IEA forecasts that price parity between EVs and ICE vehicles could be reached in ex-China markets by 2030.
This base case scenario is based on consumer demand replacing policy-driven demand as battery prices decline, costs become competitive with ICE vehicles and battery technologies improve range and performance.
In 2024, the global EV market is sending clear signals that this is very much a growth stage market. The early adopters have bought in and now automakers must prove to the average consumer that their product is worth consumers’ hard-earned dollars. Additionally, if governments want car buyers to come along for the ride on the road to net-zero, they’ll have to play a bigger role incentivizing both consumers and producers to go all-in on EVs.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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