2024’s Electric Vehicle Sales Slowdown Forces Automakers to Change Course

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Japanese automaker Toyota Motor is reportedly delaying its plans to begin assembling an electric vehicle in the U.S. in 2025-2026 in response to a market slowdown.

It is the latest in a string of announcements from automakers, including Porsche, Bentley, Aston Marton, Volkswagen, Apple, and Ineos, announcing that they are pushing back their EV plans in various markets as sales have not materialized as they had anticipated.

In recent years, the automotive industry has seemed to be accelerating toward an electric future. EVs have been hailed as the solution to mitigate climate change and reduce dependency on imported fossil fuels.

Technology enthusiasts embraced forward-thinking companies like Tesla, which promoted EVs as a status symbol as much as an environmental imperative.

Traditional automakers leapt on the bandwagon to avoid the risk of being left behind, and automakers like Ford, General Motors (GM), Toyota and Volkswagen announced plans to transition their model lineups entirely to electric.

But put a new destination in the GPS, as EV sales are going the wrong way. Join Techopedia as we examine the global slowdown and EV manufacturer plans for the years ahead.

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Key Takeaways

  • EV sales have slowed in Europe and other regions outside China after record growth in 2023.
  • Major automakers are delaying the completion of production plants and new EV launches as interest in buying EVs slows.
  • The cost of producing EVs and their batteries remains high, making them expensive for manufacturers and consumers compared to gasoline-powered cars.
  • A lack of widespread charging infrastructure, particularly in rural areas, has made it difficult for consumers to put aside their range anxiety, leading to slower adoption.
  • Many automakers are adopting a more gradual approach to the all-electric transition, using hybrids to meet emissions targets and bridge the gap until EV technology and infrastructure improve.

EV Sales Decline Outside China

Governments around the world were encouraged by the growing availability of EVs of various classes, from luxury sports cars to practical trucks to affordable SUVs, and adopted mandates phasing out the sale of new internal combustion engine (ICE) vehicles as soon as 2030.

Strategic concerns also played a role, as governments supported massive investments in EV infrastructure and manufacturing to protect their markets from lower-priced imports and supply chain disruptions.

However, the pace of new EV sales globally has slowed in 2024 after a record year in 2023.

According to the International Energy Agency (IEA), worldwide EV sales approached 14 million in 2023, up by 3.5 million or 35% from 2022. The total number of EVs on the road reached 40 million, up from 10 million in 2020.

Sales grew in the first half of 2024, too, growing by 20% compared with the first half of 2023, according to Rho Motion. A 30% increase in sales in China kept the market afloat.

But sales in Europe grew by just 1% year on year, a less optimistic EV trend than we were expecting.

According to the European Automobile Manufacturers’ Association (ACEA), new registrations of battery-powered vehicles in the European Union (EU) dropped by 43.9% in August 2024, and their total market share dropped from 21% to 14.4% year-on-year.

This was the fourth consecutive month of decline, in contrast with almost consistent month-on-month increases in 2023.

“A continuous trend of shrinking market share for battery electric cars in the EU sends an extremely worrying signal to industry and policymakers,” the lobbying group stated.

Automakers Slow EV Rollouts in Response to Changing Market

In addition to Toyota, a number of major automakers have announced delays to their electric vehicle rollouts, particularly in the US.

Ford electric vehicles are also hitting a speed bump after the manufacturer announced over the summer that it is adjusting its EV strategy, delaying production of its “Project T3” electric truck — previously scheduled to start in 2025 — until the second half of 2027.

General Motors (GM) has delayed several of its EV projects, including delaying the production of the Chevrolet Silverado EV at the Orion Assembly plant in Michigan from late 2024 to mid-2026, the launch of the first Buick EV in North America, and battery production at its joint venture with Samsung SDI from 2026 to 2027.

General Motors is delaying several of its EV projects, including the production of the Chevrolet Silverado EV
General Motors is delaying several of its EV projects, including the production of the Chevrolet Silverado EV. (GM)

As a result, although the automaker sold a record 32,095 EVs in the US during the third quarter of 2024, the company will not reach its target of having the capacity to produce 1 million EVs a year by 2025.

Exploring electronic vehicle news from across the sector, other delays include:

  • Ineos postponing production of its planned Fusilier EV indefinitely;
  • Porsche and Bentley are putting off their transitions to all-electric;
  • Aston Marton delaying its first EV;
  • Apple canceling its electric car project.

Volkswagen is pushing back the launch of its low-priced Trinity flagship EV in Europe all the way to 2032—having previously targeted a launch in 2026—in response to sluggish demand.

EV Delays 2024 by Automaker

Automaker Model(s) Affected Original Release Date New Date
Toyota First US-made EV (three-row SUV) 2025 2026
GM Buick EV 2024 TBC
Ford Large three-row all-electric SUV, next electric pickup truck 2025 TBC
Volvo Full EV lineup 2030 Beyond 2030
Volkswagen Trinity; ID.4, ID. Buzz, ID.7 in U.S. 2023; 2026 for Trinity US models TBC; Trinity 2032
Peugeot E-3008, E-208, E-308 in Australia 2024 2025 earliest
Aston Martin First EV 2025 2027
Ineos Fusilier 2027 TBD

Peugeot Australia has also “revised the timeline for the introduction of future electric vehicles” and will no longer sell plug-in hybrid models, citing a “rapidly evolving and dynamic” EV market for passenger and SUV vehicles.

Instead, the company is launching a new hybrid range for all of its passenger and SUV models by 2025. Hybrid vehicles, which combine an internal combustion engine with an electric motor, are viewed as a safer bet than pure electric cars for the immediate future.

Automakers Double Down on Hybrids

Peugeot is not alone in reconsidering hybrids. Swedish automaker Volvo Cars has abandoned its target of going all-electric by 2030, stating last month that it now expects up to 10% of its world market sales volume to consist of plug-in hybrid models.

The company “decided to adjust its electrification ambitions due to changing market conditions and customer demands,” adding that:

“There has been a slower than expected rollout of charging infrastructure, withdrawal of government incentives in some markets and additional uncertainties created by recent tariffs on EVs in various markets.

“With this in mind, Volvo Cars continues to see the need for stronger and more stable government policies to support the transition to electrification.”

In announcing its delays, Ford said that because “some commercial applications and for larger vehicles, the battery cost of a pure electric vehicle remains challenging,” it will develop a new range of three-row hybrid SUVs.

Ford stated that hybrids can offer “breakthrough efficiency, performance benefits, and emissions reductions versus pure gas vehicles and extend the range of the vehicle on road trips relative to pure electric vehicles.”

Hybrids were the only vehicle type that saw a growth in new registrations in Europe in August, rising by 6.6% to 201,552 units. Overall market share reached 31.3%, up from 24% in August 2023.

Given the challenges of transitioning to a pure EV lineup, including high production costs, supply chain disruptions and component shortages, consumer hesitation and insufficient charging infrastructure, many automakers are rethinking their all-electric ambitions and opting for a more balanced approach.

Hybrids to Bridge the Gap

Hybrid vehicles are seen as a compromise between traditional gasoline-powered cars and fully electric models. They offer a pragmatic solution that allows automakers to demonstrate to governments, regulators, and consumers that they are improving fuel efficiency and reducing carbon emissions, but without the range and infrastructure limitations of pure EVs.

Rather than designing and producing EVs from the ground up, most automakers already have established ICE technologies that they can combine with electric components, reducing the need for a total overhaul of their manufacturing processes.

In this way, they can sell vehicles with lower emissions and without the high costs associated with fully electric models — buying more time to overcome some of the challenges associated with EVs.

Hybrids can run in electric mode for short distances, reducing fuel consumption while still providing drivers with the reassurance of a gasoline engine for longer trips. This has made them particularly attractive to drivers in areas where EV infrastructure is still developing and those who are hesitant to go fully electric but may be more willing to adopt a hybrid as a stepping stone.

Reflecting sentiment among drivers, the August used car consumer tracker compiled by UK car finance company Startline (PDF) showed that hybrid cars (28%) came in slightly above EVs (26%) as the type of vehicle they would definitely buy.

In addition, 60% of potential buyers might consider a hybrid — more than the 46% who might consider an EV and 42% who might consider a gasoline-fueled car.

The Bottom Line

The vision of a fully electric future is still alive, but the road to achieving it is clearly more complex than initially thought.

High production costs, supply chain disruptions, and infrastructure limitations have caused automakers to halt their all-EV strategies.

As automakers figure out the challenges, we’ll likely see a more gradual EV transition as they choose to hedge their bets by doubling down on hybrid technologies as a short-term solution to help bridge the gap.

FAQs

Why are EV sales slowing down in 2024?

Which automakers are delaying their EV plans?

Are hybrid vehicles gaining popularity over fully electric vehicles?

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Nicole Willing
Technology Journalist
Nicole Willing
Technology Journalist

Nicole is a professional journalist with 20 years of experience in writing and editing. Her expertise spans both the tech and financial industries. She has developed expertise in covering commodity, equity, and cryptocurrency markets, as well as the latest trends across the technology sector, from semiconductors to electric vehicles. She holds a degree in Journalism from City University, London. Having embraced the digital nomad lifestyle, she can usually be found on the beach brushing sand out of her keyboard in between snorkeling trips.