EV Market Outlook 2024｜HVs More Popular? What are the 4 trends that the industry is focusing on?

The growth of the electric vehicle (EV) market has been spectacular in recent years, but the situation seems to be changing these days. What kind of growth and changes are expected this year? In this article, we will discuss the trends to watch for as the EV market expands in 2024. We will also discuss the recent popularity of hybrid vehicles (HV), which is attracting attention along with the EV market, and finally, we will discuss two political events that are said to influence the future of the industry.

Introduction: Are EVs in vogue? Are they becoming stagnant?

In this chapter, we will analyze the EV market in early 2024 and the four trends expected over the course of this year, based on the Nasdaq report. Let’s follow them immediately.

See also: EV Trends for 2024: What to Expect from the Electric Vehicle Market

EV sales surged in 2023, but recently we have heard that sales have declined in some areas. Will EVs, which have spread rapidly over the past few years, come to a head here?

However, according to Nasdaq, we can expect EV sales to continue to grow. While there are many different views flying around, EV sales themselves are expected to continue to grow steadily.

Since the fourth quarter of 2021, battery electric vehicle (BEV) and plug-in hybrid (PHEV) sales have recorded the fastest annual growth rate in the U.S. market, with EV sales exceeding 1 million units for the first time in September 2023. Recently, however, negative speculation about EV sales has begun to emerge in some quarters. For example, BloombergNEF reported that the sales forecast had been revised downward. However, it appears that the forecast has since been increased by more than 20%. Furthermore, Cox Automotive predicts that all-electric vehicles will account for more than 10% of total sales in 2024. Including hybrids, EVs are expected to account for about 24% of vehicle sales next year. *

*See Nasdaq. Note that the source of the data appears to be Forecast: 2024.

Next, we will look at four trends that Nasdaq has identified for further EV market expansion in 2024.

Trend 1: Vehicle price reductions

The first trend projected for 2024 and beyond is lower vehicle prices. There is one that will make them more affordable for more people.

It is quite understandable that for the average consumer, price is a reason not to buy an EV. To take a simple example, according to industry analyst J.D. Power, it currently takes a budget of about $50,000 to $60,000 (7.5 to 9 million yen) to purchase an EV in the US, which is enough to buy a Kia or Cadillac. *¹There are so many countries where governments subsidize the purchase of EVs to promote them, which shows how important the approach to purchase price is. Manufacturers are not neglecting this effort, and it is predicted that they will reduce the prices of more EV models in order to further promote EVs.

To achieve this, technology is essential to achieve low-cost manufacturing. Ford and General Motors (GM) have shown a willingness to partner with other companies to lower the cost of EV technology. Major European manufacturers such as Sterantis and Renault are also looking to produce more affordable EVs. The intention is to compete with Chinese manufacturers, most notably BYD, which is offering the most affordable EVs, but the result may support a positive consumer purchasing experience.

*¹Reference article How EVs became such a massive disappointment
*²Reference article Western automakers focus on EV cost reduction in competition with China

Trend 2: Improvements in Individual EV Battery Technology

Solid-state EV battery technology has continued to evolve rapidly in recent years, and this trend is expected to continue in 2024.

One of the more high-profile technologies in EV batteries will be Toyota’s announcement of a solid EV battery with a 745-mile range, plus a mass production contract signed in October 2023 for a solid battery with a 932-mile range. Toyota as well as other manufacturers are expected to accelerate solid EV battery technology.

The advantage of these batteries is that more energy can be packed into the same space, greatly extending the range. If range anxiety is eliminated, EVs may become a more attractive option for buyers.

Trend 3: Industry Standardization of Tesla’s EV Charging Plugs

It is conceivable that Tesla charging plugs will become more widely available.

In November 2022, Tesla announced improvements in charging technology and the opening of charging spots to other companies, and since then, Tesla’s charging stations have been available to vehicles from other manufacturers. 2023 will see major manufacturers such as Ford, GM, Honda, and Sterantis adopt Tesla’s charging plugs and use Tesla’s charging network. ³³

The ability to use existing Tesla charging spots without having to wait for the expansion of dedicated charging boats for each manufacturer would reduce user concerns about range. There are currently about 45,000 charging spots worldwide, 12,000 of which are in North America. It is predicted that all manufacturers in North America will adopt Tesla’s charging plugs in the future, and it is hoped that this trend will spread worldwide.

*³, *³’ See also Stellantis becomes the last major automaker to adopt Tesla’s charging plug

Trend 4: Penetration of battery replacement technology

In addition to fixed batteries, the possibility of battery replacement continues to be explored as a method of EV charging.

For example, it has been reported that car manufacturer Stellantis has signed a contract with Ample, which has developed a modular battery replacement technology that can be charged to 100% in a matter of minutes. We would like to continue to focus on battery replacement technology next to fixed batteries .

The above trends can be categorized into,

• Trends in OEMs ( Trend 1 Trends in OEMs (Trend 1)
• Trends in Suppliers ( Trend 2 & & & 4 Trends in Suppliers (Trends 2 & 4)
• Trends in Infrastructure (Mobility Services) (Trend 3) Trend 3 Trends in Infrastructure (Mobility Services)

This can be understood as follows.

The trends in the automotive industry and EV market can be summed up in a single word, but it is easy to see that there are many layers of overlapping fields that influence each other, and that each is progressing toward the “further spread of EVs. If you can understand the trends in your field within the overall industry, you will have a better understanding of the industry as a whole.

Hybrid vehicles (HV) resurgence in popularity

So far, we have looked at the growth potential of the EV market. Recently, however, hybrid vehicles (HVs) have begun to regain popularity worldwide compared to EVs , and their sales are said to be increasing. In fact, Toyota and other Japanese OEMs were known to be slower to embark on EVs compared to manufacturers in other countries, but as HVs began to attract attention, their sales volume grew.

The shift to EVs, including battery electric vehicles (BEVs), has not been criticized by any means, but the question remains as to whether they are the best type of vehicle for the current lifestyle on the part of users. Specifically, the spread of recharging spots and improvements in battery performance have not kept pace, and the concerns about recharging while driving have not yet been resolved, plus the relatively high price, are factors that have led many to be reluctant to adopt EVs. In comparison, it is understandable that HVs are attractive to consumers because they can use gasoline for fuel, are less expensive to purchase, and are an environmentally friendly option compared to gasoline-powered vehicles.

To recap,

• Charging spots have not kept pace with the spread of charging spots and improvements in battery performance, and still concerns about charging while driving have not yet been resolved.
• Relatively high prices

These are the flip side of the trends related to EVs discussed in the previous chapter.

• Widespread use of charging spots →. Trend 3
• Improved battery performance →. Trend 2 & (2) 4
• Price Decline → Trend 1

Rather, it can be interpreted that while interest in EVs is growing, HVs are being chosen as a compromise solution in a situation where the system to accept EVs in daily life is not yet sufficiently in place.
The popularity of HVs may continue for some time, but the focus on EVs is not likely to wane. These trends, which are key to EV market expansion, should continue to grow in the future.

Upcoming Events to Watch

Finally, we will touch on political events in 2024 that we believe will determine the future of the EV market.

– U.S. Presidential Election
The U.S. presidential election will be held on November 5, and its outcome is expected to have a considerable impact on EV promotion during this year.

If the incumbent Mr. Biden is elected, the current EV promotion policy will likely continue, but if Mr. Trump, the Republican candidate, is elected, not only will there be a delay in that policy, but the environmental policy may be reversed.

It is clear that even now (March 2024), Biden and Trump’s views on environmental policy are very different, and they are still in a state of mutual hostility. Election strategy also seems to be influencing environmental policy, with Biden recently announcing a major revision of his EV ratio target in light of opposition to his own environmental policies. *²As such, we should pay close attention to each candidate’s every move, as direct policy changes to the auto industry are expected.

*²=The U.S. administration has drastically lowered the EV ratio target by 2032, and the presidential election may have an impact.

– European Parliament Election
The European Parliament is a law-making body that works with the Council of the European Union, and its members are elected directly within member states.

The focus of the election to be held at the beginning of June is how many seats will be won by the right-wing and far-right parties that have been gaining power in European countries in recent years, If the right-wing parties gain seats, they will be the ones to win the election. If right-wing parties gain more seats, there may be a delay in decision-making on environmental policies to protect domestic industry, or there may be a move to ease restrictions on environmental policies.

The growth of the EV market, which is strongly linked to environmental policies, may slow down or even shrink as those policies stagnate. The presidential election will determine the future of the U.S., and the European Parliamentary election could be a turning point for the EU, both of which require careful monitoring of trends.

Finally.

In the words of the aforementioned Nasdaq article, “more” is the key word for EV trends in 2024.

Expect more models, more affordability, longer range, better technology, and more charging options. Understanding EV trends is critical to predicting trends in the automotive industry, as the potential of the automobile is increasingly in the spotlight, plus the need to reduce CO2 emissions is becoming increasingly clear.

Manufacturers in various countries are engaged in fierce competition, and it remains to be seen which companies will come up with which measures and technologies, and how the two elections held this year will affect EV strategies in the future. It is necessary to keep a close watch on these trends, keeping abreast of them without getting caught up in past achievements or brands.

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