Electric car sales growth appears to have slumped with people said to be put off by the high price tag. Tesla‘s global deliveries fell to 387,000 between January and March this year, compared to 423,000 over the same period in 2023.
Its rival, BYD, sold just over 300,000 battery cars in the first quarter of 2024, down from a record 526,000 in the last three months of 2023, figures cited by the BBC show.
For the year to January 2024, a total of 20,935 new battery-powered electric vehicles were registered in the UK, with a market share of 14.7 percent, according to the Society of Motor Manufacturers & Traders (SMMT).
Sales around the world need to grow at pace if countries are to bring down planet-warming emissions, with road transport making up 12 percent of greenhouse gases.
The International Energy Agency (IEA) has said there will need to be 790 million EVs if the world is to reach Net Zero by 2050. It has stated the fleet of EVs would need to grow at an average annual rate of 27 percent by 2035 to reach that figure.
However, EV sales in Europe fell over 10 percent year on year in the final three months of 2023. BloombergNEF reported in April that 4.4 million EVs were sold globally in the fourth quarter, with 13.7 million for the whole of last year.
While EV sales are forecast to carry on rising – BloombergNEF expects them to reach 16.7 million in 2024 – a likely slowdown in annual growth rates is “on the horizon”, with regulatory changes in Europe, market saturation in China, and uncertainty in the lead-up to the US presidential election poised to “take a bite out of consumer confidence”, according to Aleksandra O’Donovan, Head of Electric Vehicles at BloombergNEF.
Analysts have said strong EV sales in the UK over recent years have been fuelled by the purchase of company cars thanks to tax breaks. But households appear to be put off by the high cost in the UK, Europe and United States, the BBC reports.
According to Bloomberg, the average price of an American EV is over £47,380 ($60,000). This compares to cheaper Chinese-made EVs, with BYD’s Seagull hatchback priced at £7,658 ($9,698).
China poses a dilemma for the UK, Europe, and the US as cheaper imports threaten to flood markets and undercut domestic production despite governments wanting EVs to help secure the transition to Net Zero.
US President Joe Biden imposed major new tariffs on Chinese electric vehicles on Tuesday (May 14), arguing that Chinese government subsidies ensure the country’s companies don’t have to turn a profit thus giving them an unfair trade advantage.
Beijing was quick to push back against the tariffs, saying they “will seriously affect the atmosphere of bilateral cooperation”. China’s foreign ministry used the word “bullying”.
The tariffs are unlikely to have a broad inflationary impact in the short term because of how they’re structured, some not to take effect until 2026, but there could be price increases in the meantime for EV batteries.
Under the findings of a four-year review on trade with China, the tax rate in the US on imported Chinese EVs will rise to 102.5 percent this year, up from total levels of 27.5 percent.
According to the BBC, optimists hope more EV buyers will emerge when second hand vehicles hit the market in the UK, US, and Europe, though this is not guaranteed.