The global battery electric vehicle (BEV) market recorded 2% year-on-year (YoY) growth in January 2023, weaker than previous years but in line with slowing growth seen across the market in 2022, according to Globaldata analyst Al Belwell.
YoY growth in 2022 was 71%, compared with 110% YoY growth in 2021.
Bedwell is the director of Global Powertrain with LMC Automotive, a Globaldata company. Speaking to Motor Finance, he reflects on the global BEV sector growth in China, the US, and the EU in 2022 and assesses the outlook for the year ahead.
China leads BEV race
China leads with 88% YoY growth in 2022, while the US proves itself a strong emerging BEV market.
China's plug-in hybrid market saw sales double in 2022, though growth was slower in 2021. National and local incentives, such as free license plates for BEV vehicles in some cities, and new product entry have bolstered China's market.
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Though tier 1 Chinese cities have high new electric vehicle (NEV) penetration rates, these rates remain variable based on location, leaving plenty of space for growth. Powertrain predicts by 2025, China could see sales of NEVs in excess of 10m units.
US BEV market gains ground
In the US, the BEV market is gaining traction as it expands into pickup and vans, with the year between 2021 and 2022 reporting 75% growth. The plug-in market, meanwhile, was spurred on by record-high transaction prices, the average of which was US$50,000.
A record 70+ new BEV models are expected to enter the US market in 2023, though SUV body styles continue to dominate the market share.
Biden's Inflation Reduction Plan (IRA) aims to boost BEV and battery production by localising battery and vehicle production and accelerating plug-in production plans.
Charging infrastructure and affordability issues are likely to hinder BEV market growth in the US, with 3 to 4 states looking to drop zero-emission vehicle regulations.
Europe's BEV market loses momentum
Though Europe's BEV market saw growth of 29% YoY in 2022, the results vary hugely by the geographical market, with Sweden leading the way and Italy's market declining by 27% in volume of sales.
In January 2023, Europe was 68% down on December 2022's volume of sales.
BEV acquisition costs remain higher than alternatives and State subsidies in Germany and France are in decline. The average BEV costs €57,000, 30% higher than alternatives (€44,000).
Though Tesla is ramping up production at their Berlin plant, their backlog order has declined, indicating a decline in incoming orders prompted by their recent price cut.