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This year's global EV market growth will stall due to reduced subsidies, according to a research

According to Canalys' analysis, the number comes after an anticipated 29% increase in 2023 to 13.7 million units, during which time government subsidies aided in the adoption of EVs.
Reuters
 

Research firm Canalys predicts that this year's growth in the global electric vehicle market will only reach 27.1% as a result of a decrease in government subsidies, which will make the vehicles less desirable to consumers.


According to Canalys' analysis, the number comes after an anticipated 29% increase in 2023 to 13.7 million units, during which time government subsidies aided in the adoption of EVs.

Demand has been affected by the reduced subsidies and increased financing costs at businesses, such as Tesla, the market leader in the United States, which reduced sticker prices last year.





"Despite a 20 percent drop in the ASP (average selling price) of EVs in 2023, insufficient product choices and inconvenient charging experience hampered demand, impacting the market growth of EVs," Jason Low, principal analyst at Canalys, stated.

According to the research organization, the North American EV market is predicted to increase by 26.8 percent by 2024, although at the lowest EV penetration rate of 12.5 percent when compared to Greater China and Europe.


China will have a 40% EV penetration rate, with 78 percent of the market held by Chinese companies due to declining battery costs driving sales of small and subcompact cars.

In the final quarter of 2023, China's BYD surpassed Tesla to become the best-selling EV manufacturer.


However, a number of established manufacturers, like Ford, have decided to reduce their ambitions to expand their production due to the general slowdown in the EV transition.

According to car research firm Edmunds, customers are finding hybrid vehicles more tempting due to this and their cheaper pricing.


According to Edmunds, the market share of these vehicles increased to 9.7% in November, almost twice as much as it did the previous year.


According to Canalys, "a solid fundamental will ensure a better position for carmakers to attain more growth in 2025 when EV growth is expected to accelerate."

Chinese automakers will soon be powerful players in the automotive industry as a result of their worldwide investments in local production.


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