As 2023 comes to an end, it’s time to reflect on where things stand on global EV adoption.
There continues to be much to celebrate. On the world scale, EVs will have likely accounted for over 14 million sales when the numbers are totalled. That will be an increase of 35 per cent over last year’s total.
China remains the world’s EV powerhouse. Unquestionably, EVs are in the mass-market phase of adoption there. They now comprise around 30 per cent of passenger car sales every month.
China re-introduced EV incentives this year for consumers to maintain that momentum against the backdrop of a sluggish economy. Buyers of new energy vehicles purchased in 2024 and 2025 will pay up to 30,000 yuan ($NZ6921) less in tax.
The US should hit the one million annual sales mark for the first time, an increase of 40 per cent over 2022. Bloomberg’s Tom Randall says, “It took 10 years for the US to sell its first million fully electric vehicles, two years to reach the second million, and just over a year to reach the third.”
Looking ahead, the prospects for further improvements in US EV sales are being tempered by headwinds. Ford and GM have scaled back their EV sales targets as it has remained challenging to electrify the pick-up truck.
And in the US, EVs are becoming politically polarised with Trump denouncing them. Most EV sales happen in blue states, and research suggests there’s a correlation between voting intentions and EV buying.
In Europe, sales are expected to see growth of about 20 per cent to more than three million vehicles through 2023. However, the removal of consumer incentives in Germany is constraining that growth.
Bloomberg expects that the Tesla Model Y will be the number one selling vehicle globally in 2023. Together Tesla and Chinese electric automaker BYD will account for six per cent of the planet’s new vehicle market this year.
In New Zealand, we will have crossed the 100,000 EV barrier by the end of 2023, which is a significant milestone. When the numbers finally come in, we will see EVs make up around 13 per cent of registrations (new and used).
This market share is only slightly higher than the 2022 figure. We are still in the early stages of adoption and some consumers remain cautious, particularly with regards to range and charger availability.
This has not been helped by an uncertain policy environment with debates over the future of the Clean Car Discount. Although that is now a goner.
In addition, it is challenging for New Zealand to source second-hand EVs, as they do not exist in Japan at anywhere near the volumes of petrol hybrid and ICE cars.
So this places some natural limits on sales, which is why accelerating the uptake of new cars in New Zealand is so important to create a future second-hand market.
We now know that the Clean Car Discount will be phased out. Globally we’ve seen that if incentives are removed too soon in the adoption cycle we can expect EV uptake to fall away.
Back to a global view, there’s burgeoning confidence on charging infrastructure and batteries. It’s expected that 1.4 million additional charging points will be installed around the world in 2023.
The economics are becoming more favourable as more people switch to EVs. But, like here in New Zealand, grid connections are a challenge.
It’s expected that battery prices will continue to come down, after a brief increase in 2022. Prices of battery metals like lithium have dropped. There’s also been progress with new battery chemistries, including solid state and sodium-ion.
The march of the electric vehicle is ongoing and uptake will continue to accelerate. However, analysts are keeping an eye on the more optimistic end of growth projections over the next couple of years.
Ultimately it will be consumers who decide, and as prices for EVs fall and charging infrastructure improves, our roads are sure to look completely different in the year 2030.
This article first appeared in the December/January 2023 issue of NZ Autocar magazine.
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