In a remarkable turn of events, the electric vehicle (EV) market is gearing up for another significant surge in 2023, with approximately 15 million electric cars, encompassing battery electric and plug-in hybrid models, expected to be shipped worldwide, according to the latest forecast by Gartner. This surge indicates a 19 percent increase compared to the previous year and sets the stage for even more impressive growth in 2024.
Gartner’s projections suggest that electric car shipments will continue their upward trajectory in 2024, reaching a staggering 17.9 million units. Furthermore, the report said that all electric vehicle shipments, including cars, buses, vans, and heavy trucks, will collectively total 18.5 million units in 2024. Notably, electric cars are poised to represent a substantial 97 percent of this total, underscoring the continued dominance of these eco-friendly vehicles in the global market.
When breaking down the figures regionally, the forecast reveals that battery electric vehicle (BEV) shipments are expected to surge from 9 million units in 2022 to 11 million units by the end of 2023. In contrast, plug-in hybrid electric vehicles (PHEVs) are projected to grow at a slightly slower pace, increasing from 3 million units in 2022 to 4 million units in 2023.
Jonathan Davenport, Senior Director Analyst at Gartner, offered insights into the regional preferences among consumers, stating, “The proportion of PHEV, as a percentage of total EVs in countries like the US, Canada, and Japan will slightly grow as consumers in those countries prefer PHEVs to BEVs.”
He explained that in these regions, consumers transitioning from traditional internal combustion engine (ICE) vehicles are gravitating toward PHEVs due to their ability to provide emission-free urban driving while offering the convenience of gasoline-powered propulsion for longer journeys.
Conversely, Western Europe, China, and to a lesser extent, India, are leaning towards BEVs. Davenport noted, “Consumers favor BEV’s lower overall running costs, quieter driving experience, and green credentials” in these areas.
Another significant development on the horizon is the shift in automaker strategies. Governments worldwide are taking measures to reduce particulate matter emissions from vehicles, and some countries are implementing legislation to only permit the sale of zero-emission vehicles.
These factors, combined with consumer demand, are prompting automakers to change their behavior. Some are aiming to eliminate tailpipe emissions from new light-duty vehicles by 2035, while others aspire to achieve 40 percent to 50 percent of their annual US vehicle sales in electric form by 2030. This trend has also given rise to new market entrants launching EV platforms.
Davenport emphasized, “Ever-tightening emission regulations will lead automakers to pivot more than half of the vehicle models marketed to EVs by 2030.”
One critical factor in the widespread adoption of EVs is price parity with traditional internal combustion engine (ICE) vehicles. Gartner analysts predict that by 2027, the average price of a BEV will align with ICE vehicles of similar size and configuration, potentially accelerating the global adoption of EVs. However, by 2030, challenges related to power generation and network capacity could potentially hinder mass EV deployment, regardless of price.
Davenport explained, “Unless countries take actions to incentivize EV drivers to charge outside peak electricity consumption periods, the switch to EVs may put an additional strain on both power generation capacity and the distribution infrastructure.”
He suggested that the implementation of dual day and night electricity tariffs or even half-hourly tariffs could encourage EV owners to charge during off-peak times. Additionally, utilities could control EV chargers directly via application programming interfaces (APIs) to manage charging during peak consumption periods and ensure grid demands are not exceeded.