Report: Global electric vehicle market growth to slow this year due to lower subsidies

Growth in the global electric vehicle market will slow to 27.1 percent this year, reaching 17.5 million vehicles, due to cuts in government subsidies. Research firm Canalys said this in its report. Last year, the electric car market grew by 29 percent to 13.7 million vehicles, according to its estimate, thanks to government incentives.

Demand is being weighed down by lower government subsidies and high borrowing costs. This is being felt by the leader in the US market, Tesla, among others; the company cut the prices of its vehicles several times last year.

„Although the average selling price of electric vehicles fell by a fifth in 2023, demand is being held back by an inadequate choice of products and inconvenient charging,“ said Canalys chief analyst Jason Low.

The research firm expects the North American electric vehicle market to grow by 26.8 percent this year. Electric vehicle penetration in the market will reach 12.5 percent, still lower than in China or Europe. In China, it is forecast to reach 40 percent, with Chinese brands accounting for 78 percent of the market.

Chinese automaker BYD overtook Tesla in the last quarter of 2023 to become the electric vehicle maker with the highest sales.

The overall slowdown in the shift to electric vehicles has prompted several established automakers, including Ford, to scale back plans to expand production. Hybrid vehicles have become more attractive to consumers, research firm Edmunds said. The market share of these vehicles rose to 9.7 percent in November, almost twice its share the previous year.

„A solid foundation will put automakers in a better position to achieve stronger growth in 2025, when the electric vehicle market is expected to accelerate,“ Canalys said in its report.

Chinese automakers will make a significant contribution to this, it said.