2024 is expected to be an exciting year for the electric vehicle (EV) industry as it continues to transform consumer and commercial mobility. According to Euromonitor’s Mobility forecasts, 25% of all new passenger car registrations are forecast to be electric in 2024, exceeding 17 million units in sales globally. Here are the top three predictions for the EV market in 2024.
Slowing EV uptake
In 2024, sales of EVs are anticipated to continue slowing as car manufacturers struggle to move the EV transition beyond the early adopters to the mass market. Slowing sales growth has already become apparent in 2023. According to the European Automobile Manufacturers Association (ACEA), in Europe, year-over-year EV ( or plug-in hybrid electric vehicles) sales in September 2023 fell by more than twice the rate compared to a year earlier.
Macroeconomic challenges will further dispel demand as higher interest rates dampen consumer appetite for EV financing. Cost has already been a key bottleneck, as EVs remain far more expensive than internal combustion engine vehicles, especially in Europe and North America. According to Euromonitor’s Voice of the Consumer: Mobility Survey, 65% of global respondents refrained from buying an EV due to their high cost.
Car manufacturers in 2024 will need to review their pricing strategies to better cater to the mass market. Several industry players have made sizable price cuts in 2023 to lure new buyers and this is likely to continue in 2024 as competition grows. In addition, improving convenience and access will further assist in mitigating some of the long-held frustrations about EV chargers including payment silos, charger undersupply, excessive charging times and poor reliability.
Cheaper EV batteries
In 2024, car manufacturers and EV battery manufacturers will focus on implementing new technologies and chemistries to reduce the cost of the EV battery. According to the International Energy Agency (IEA), up to 40% of the cost of the EV is made up of the battery. In 2024, the focus will be on incorporating new chemistries in the EV battery, especially the cathode, which minimises the use of expensive metals such as lithium carbonate, nickel and cobalt.
Several car manufacturers have already pivoted or invested in less expensive battery technologies, including the world’s leading EV brands, Tesla and BYD. Tesla has recently shifted to the use of lithium iron phosphate (LFP) batteries and has plans to further scale their use in upcoming semi-trucks. BYD is also actively looking to develop sodium-ion batteries which are considerably cheaper than traditional lithium types.
The shift to cheaper EV batteries in 2024 will play a key role in helping EV firms continue cutting prices and developing more attractive pricing strategies for the mass market. However, patience will be needed as the production of battery technologies with new materials will take time to reach the market.
Shift to Tesla chargers
In 2024, Tesla is anticipated to expand its dominance in the EV charging industry. Earlier in 2023, Ford, GM and Honda, among others, announced plans to adopt Tesla’s EV charging port, the North American Charging Standard (NACS) connector. As a short-term solution, Tesla has developed an adapter that can be used for non-Teslas when charging at its locations. However, in the long run, car manufacturers will be directly incorporating Tesla charger port compatibility in their vehicles; for example, Ford plans to equip its new EVs with the NACS port from 2025.
Tesla’s vast supercharger network, spanning over 50,000 globally, has been a pivotal driver for which have often been dismayed by the slow pace of charging and poor reliability of public chargers. This move could be a game changer for the industry which has struggled to overcome range anxiety fears. According to Euromonitor’s Voice of the Consumer: Mobility Survey 2023, 42% of respondents did not buy an EV due to an inadequate EV charging infrastructure.
More OEMs in 2024 are likely to follow suit in developing partnerships with Tesla and will put the NACS connector port in prime position to dominate the market for EV charging. According to the White House, at least 7,500 Tesla chargers will be available for non-Teslas by the end of 2024. This may assist in boosting EV adoption among the mass market who often cite the lack of charging as the main barrier to their EV transition.
2024 is expected to be an intriguing year for the EV industry as it enters the mass market phase. Building strategic partnerships and investing in new innovations which directly address key challenges will be the route to success for OEMs in the year ahead.
Learn more about the best markets for the EV transition in the report, EV Readiness Index 2023, and the state of the battery and metals supply industry in the report, Future of the EV: Assessing Battery and Metals Supply.