EV sales continue to rise, but the last year of headlines falsely stating otherwise would leave you thinking they haven’t. After about full year of these lies, it would be nice for journalists to stop pushing this false narrative that they could find the truth behind by simply looking up a single number for once.
Here’s what’s actually happening: Over the course of the last year or so, sales of battery electric vehicles, while continuing to grow, have posted lower year-over-year percentage growth rates than they had in previous years.
This alone is not particularly remarkable – it is inevitable that any growing product or category will show slower percentage growth rates as sales rise, particularly one that has been growing at such a fast rate for so long.
In some recent years, we’ve even seen year-over-year doublings in EV market share (though one of those was 2020->2021, which was anomalous). To expect improvement at that level perpetually would be close to impossible – after 3 years of doubling market share from 2023’s 18% number, EVs would account for more than 100% of the global automotive market, which cannot happen.
Instead of the perpetual 50% CAGR that had been optimistically expected, we are seeing growth rates this year of ~10% in advanced economies, and higher in economies with lower EV penetration (+40% in “rest of world” beyond US/EU/China). Notably, this ~10% growth rate is higher than the above Norway example, which nobody would consider a “slump” at 94% market share.
It’s also clear that EV sales growth rates are being held back in the short term by Tesla, which has heretofore been the global leader in EV sales. Tesla actually has seen a year-over-year reduction in sales in recent quarters – likely at least partially due to chaotic leadership at the wayward EV leader – as buyers have been drawn to other brands, while most of which have seen significant increases in EV sales.
One of the key reasons traditional manufacturers were reluctant to build EVs is because of the batteries needed and their lack of ability to make these themselves. A battery on a brand new EV can be half or more of the total cost to build the car, who wants to pay somebody else, who is going to expect to make a profit on the batteries they sell, half the cost of the build to a competitor or third party for any true mass market car? You cannot start to compete on price or volume till you make your own batteries and cut out that profit of the third party.
When it became clear that the Traditional Manufacturers could no longer avoid ramping up EV production as Tesla and latter China/Korea were stealing their future market they have shit the bed, begging for subsidies to build their own battery factories and recruiting staff with experience. Its going to take a few years before these factories come on line, but till then you will see them pushing things like PHEVs and halo EVs like the F150 that they do not plan in selling in large volumes in favor of ICE that they make the engine.
There is also an element of the speed of development of EVs, they were clearly caught out how fast the market moved with efficiency and thus range. As an example, the early VW group EVs were awful, at least a generation behind the best from Korea or Tesla. The latest ID7 and A6 etrons show that VW have acknowledged their mistake, the saloons made on that platform (the SUVs on the same platform just cannot compete due to worse drag and weight) seem to be aiming around 4 miles per kwh, which is extremely impressive for such large saloons.
Improving efficiency is the key to reducing battery sizes, which reduces weight, which further improves efficiency, but most importantly reduces the cost of EVs. We need to move away from 100kwh+ batteries, they are a crutch for inefficient, bricks of SUVs that are far too large and heavy. Manufacturers just up the battery size to counter their poor design decisions, which leads to disappointment when you realize you struggling to get 2 miles per kwh from your 2.5 ton EV9 and its only doing low 200s out of a 100kwh battery.