Global Electric Vehicle Market Reeling
‘The sands are shifting for the global EV market’.
The global electric vehicle market is reeling from one of the most dramatic collapses in monthly sales to date, Rystad Energy noted in a statement sent to Rigzone this week. According to the company’s research, 672,000 units were sold in January 2023, which Rystad highlighted was almost half of December 2022 sales and a three percent year on year increase over January 2022. The company also revealed that electric vehicle market share among all passenger car sales dropped to 14 percent in January 2023 from 23 percent in December 2022. A graph included in Rystad’s statement stretching back to January 2021 showed that electric vehicle sales and market share peaked in December last year.
Electric vehicle sales increased in seven out of 12 months in 2022, according to the graph, which showed that market share almost doubled from January 2022 to December 2022. In the statement sent to Rigzone, Rystad stated that tax credits and government subsidies have propped up the electric vehicle market to date and noted that the reduction or removal of these subsidies this year has dampened consumer sentiment. The company said the automotive market is usually cyclical with sales taking a hit after new subsidy rules comes into effect at the start of each year followed by a gradual recovery, but added that the cuts in January 2023 “hit harder than normal, triggering this dramatic collapse”.
Rystad warned in the statement that the ramifications of this will be “long-lasting” and outlined that it will impact sales through the first quarter of the year “and potentially the rest of 2023”. “The sands are shifting for the global EV market,” Abhishek Murali, a clean tech analyst with Rystad Energy, said in a company statement. “Consumer appetite for electric cars remains strong, but it’s clear that tax credits and subsidies still play a significant role in convincing consumers to make the switch. Carmakers may have no option but to respond with reduced prices,” he added.
Electric Vehicle Offset, Charging Points, Sticker Prices In a separate statement posted on its website last month, Rystad noted that electric vehicle adoption is approaching the levels needed to offset the annual global growth of the size of the active car fleet. “Transport emissions increased by 0.2 Gtpa (gigatons per annum) to reach 7.8 Gtpa in 2022 – falling short of pre-Covid peaks of 8.2 Gtpa due to the continued weakness of the aviation sector, triggered by the pandemic and accelerating penetration of electric vehicles,” Rystad stated at the time. In another statement published on Rystad’s site in October last year, Rystad revealed that its data showed “charging points deployment needs to ramp up if it is to reach the targets countries have set for electric vehicle adoption, which are often an integral part of net zero emission cut plans”.
That statement also highlighted that Rystad research showed, at the time, that “public charging infrastructure is not a limiting factor to the fast adoption of electric vehicles, especially in nascent markets”. “In countries such as Germany, France, and Netherlands, there is no direct correlation between the growth of charging infrastructure and the number of electric vehicles sold,” Rystad said in that statement. “Of far more significance to consumers are issues such as high fuel prices for combustion engines or high sticker prices for electric vehicles,” Rystad added.