The outlook for electric vehicle (EV) sales in 2024 remains positive, but the proverbial road ahead is increasingly littered with potholes called regulation and market demand.
According to the International Energy Agency in its Global EV Outlook report for 2024, the headline of 17 million units (or vehicles) to be sold in 2024 — or 20% of all new car sales — suggests positivity.
Headlines are great at a ‘bottomline’ globally, but rather limited in telling the story of the pain points when such reporting delves into what is happening at the ground floor (or your local region, if you prefer geographic reasoning).
In Europe, car giants are increasingly worried about massive fines as the region tightens carbon regulations.
From 2024, the European Union’s cap on average emissions from new vehicle sales will fall to 93.6 grams of CO2 per kilometer, putting pressure on automakers to accelerate EV adoption.
CNBC’s Sam Meredith wrote earlier this week that the prospect of mega fines in Europe come on the back of US concerns about Chinese software in EV units.
Meredith reported Renault CEO Luca de Meo recently warned that if EV sales continue at their current pace, the European auto industry could face up to €15 billion ($24.2 billion) in financial penalties.
(For those wondering, $24 billion buys almost 500,000 motor vehicles worth $50,000 each, or 2% of total vehicles on Australian roads.)
Renault, like Mercedes, is also dealing with a demand equation that involves customers not flocking to EV car yards in the numbers originally forecast.
Now that is a problem, and while Chinese output accounts for more than half of the world’s EV sales, those pesky customers aren’t buying.
The Biden administration putting tariffs on Chinese software in electric vehicles is tantamount to banning product coming from the US’s major trading partner.
For US car makers, even major companies are finding a market deeply attached to fuel cars according to accounting firm KPMG, and for those waiting for a transition, the timelines imagined for 2030 look less realistic.
Industry leader Tesla has also faced setbacks, recently recalling more than 27,000 Cybertrucks to fix a reverse camera delay.
The prevailing car world order is still a confidence game, and following an escalation of tension in the Middle East, oil prices spiked again this week, where a feeling of pessimism clearly pervades global markets in October.
For the EV market however, the brutal arithmetic which underpins that same confidence is sales driven by a buoyant economy which, on current trends, has taken a hit.
While the EV story is compelling it is one where cars will be… cars; and no matter how great the policy pump it, will only fuel sales by so much.
Dan Petrie is Mining.com.au’s Head of Data, a former data editor at Bloomberg LP, analyst at Macquarie Bank and contributing data expert to Google Digital News Academy.
Images: Rochelle Padua & iStock
