EVs the ‘one bright spot’ in the 2024 automotive market – report

The shift to EVs will gather pace, but China’s dominance of the sector will add to geopolitical tensions.

That’s a major finding from The Economist Group research and analysis division EIU which has released its Automotive in 2024 report assessing growth prospects, top risks and key trends.

Given challenging conditions for new vehicle demand and supply in 2024, EIU expects global automotive sales to remain in low gear next year.

Factors constraining sales include weak global economic growth, elevated living costs in developing countries and higher interest rates, it adds.

“EVs remain the one bright spot in the automotive market, as demand for other types of vehicles remains very subdued,” says EIU automotive analyst Nishita Aggarwal.

“But the EV market will face its own challenges in 2024 given the geopolitical tensions over China’s dominance of the sector and over key supplies of critical minerals.

“We expect the EU to raise trade barriers as European carmakers try to protect their market share against China’s EV exports, while the US will also focus on local production,” Aggarwal explains.

“New battery types will add to the complications.”

EIU says key trends to watch in 2024 include:

•              The global automotive sector will be weighed down by slow consumer spending, high interest rates and the transition to EVs. We expect passenger car sales to rise by 3%, with sales of commercial vehicles and buses (CVs) up by 1%.

•              EVs will remain the most buoyant part of the market, with sales rising by 21% to 14.9 million units. China will account for more than half of global EV sales and a similar share of exports, but the Chinese government’s support for the sector will prompt trade tensions.

•              Emissions legislation will tighten further, with many cities introducing clean air regulations that will affect vehicle usage. We expect the restrictions to support demand for newer vehicles, including EVs, but to dampen sales of secondhand vehicles.

•              Policymakers and automakers will work to ease range anxiety among EV users. This will include a switch in charging standards, the deployment of fast-charging stations and the rollout of new battery technologies for better range and performance.

This report is part of a wider series that looks at the growth prospects for six sectors of the global economy – automotive, consumer goods and retail, energy, financial services, healthcare, and technology and telecoms.

Click here to download the full industries 2024 report.