In a pivotal year for the electric vehicle (EV) industry, research from Rystad Energy reveals that China is at the forefront, representing 69% of all new EV sales in December. According to the company's projections, global EV sales are expected to reach 17.5 million, assuming an annual increase of 18.5 %. As a result, the percentage of new car sales that are battery electric (BEV) or plug-in hybrid electric (PHEV) will increase from 19.2% in 2023 to around 21.8% by the end of 2024. 4n1367

The study also reveals that China, with its considerable growth in domestic production, will play a leading role in the continued expansion of the electric vehicle market. Around 11.5 million new electric vehicles are forecast to be sold in the country this year, ing for 44% of all new car sales.

According to Rystad, China's leadership in the sector is undeniable, with 37% annual growth in electric vehicle sales in the last year, reaching 9 million units sold and a market share of 34%. Furthermore, China has sured its own targets by aiming for a 45% market share by 2027, ahead of the initial target of 40% by 2030.

In this context, as China consolidates its position as a global leader in electric vehicles, non-Chinese automakers face challenges in penetrating this competitive market. Moreover, according to Rystad, despite the aggressive expansion of Chinese automakers in emerging markets, local players are experiencing pressures to adapt and compete.

Closing 2023 with 26.5 million enger 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 ed for 27.6% of car sales for the month and 40% of all sales.

On the other hand, Outside China the situation is different, in Europe, slower growth in EV market penetration is expected, with 3.3 million units projected for this year. In the United States, uncertainty around tax credits and interest rates has complicated consumers' decision to transition to electric vehicles.

“Riding last year's momentum, Chinese automakers are aggressively expanding into emerging markets, overshadowing established players. This eastward shift is particularly evident in Europe, where a stagnant EV market finds hope in the arrival of budget-friendly Chinese brands. However, this influx also presents challenges: local automakers face mounting pressure to adapt, struggling with plant conversions and production delays. China's pivotal role in this dynamic becomes even more pronounced as a global supply chain leader. Meanwhile, in the West, the US presents a complex landscape. The Inflation Reduction Act's subsidies offer a potential boon, but strict rules on foreign entities ultimately dampen automotive spending, particularly in the EV segment.” Said Abhishek Murali, Senior Energy Systems Analyst.

Source: Rystad Energy

Is there uncertainty about the long-term viability of PHEVs, despite encouraging prospects?

According to Rystad, in of electric vehicle types, plug-in hybrid cars (PHEVs) show remarkable resilience, especially in the United States, where consumer preference has shifted towards these models in the second half of 2023.This suggests a potentially crucial role for PHEVs as a transitional technology in the phase-out of internal combustion engine vehicles.

Source: Rystad Energy

Additionally, US electric vehicle giant Tesla celebrated an outstanding fourth quarter with a record 484,500 deliveries. However, CEO Elon Musk expressed concerns about sustaining this growth until 2024 and announced plans to build a factory in Mexico. Meanwhile, Chinese manufacturer BYD emerged as the largest EV manufacturer in 2023, suring Tesla in BEV deliveries, with more than 942,000 vehicles sold in the last quarter and a total of 3 million EVs for the year. Although they fell short of their initial target of 4 million, BYD remains optimistic and is poised to continue its growth trajectory.