IEA "Global EV Sales Up 20% This Year... Half of New Cars to Be EVs in 10 Years"

"Electric Vehicle Sales Expected to Reach 17 Million Units This Year"
Uncertain Whether Individual Manufacturers Will Drive Revenue Growth

This year, global electric vehicle sales are expected to increase by more than 20%, reaching 17 million units. Although the U.S. electric vehicle company Tesla showed results below market expectations, it is analyzed that China will lead electric vehicle sales in the future.

According to major foreign media such as CNN on the 23rd (local time), the International Energy Agency (IEA) forecasted in its annual outlook report that this year's global electric vehicle (including plug-in hybrids) sales will exceed 17 million units, an increase of more than 20% compared to last year. Furthermore, it is expected that by 2035, electric vehicle sales will account for two-thirds of global automobile sales.

[Image source=AP Yonhap News]

The IEA also evaluated that the rising demand for electric vehicles will revolutionize the global automotive industry and significantly reduce oil consumption in road transport. Fatih Birol, Executive Director of the IEA, explained, "Recent news about a slowdown in electric vehicle sales does not accurately reflect actual sales trends," adding, "The electric vehicle industry is not going backward but preparing for a new phase of growth."

This diagnosis by the IEA is partially confirmed by actual data. According to the China Passenger Car Association (CPCA), last year's electric vehicle deliveries in China increased by 37% year-on-year to 8.9 million units. Additionally, according to the European Automobile Manufacturers Association, battery electric vehicle sales in the European Union (EU) in the first quarter of this year increased by 4% compared to the same period last year.

However, it is uncertain whether this increase in electric vehicle sales will translate into revenue growth for individual manufacturers. Tesla's first-quarter revenue this year decreased by 9% compared to the same period last year, marking the largest decline since 2012, and its net profit during the same period fell by 55%, falling short of market expectations. In particular, Tesla's vehicle sales revenue in the first quarter was $17.34 billion, down 13% from a year earlier. Tesla's stock price has also plummeted by more than 40% since the beginning of this year.

BYD of China, which surpassed Tesla to become the number one electric vehicle seller in the fourth quarter of last year, saw its pure electric vehicle deliveries in the first quarter of this year (301,014 units) decrease by 42% compared to the previous quarter (526,409 units). The poor performance of these two major electric vehicle companies stems from intensified price competition. BYD has significantly lowered the prices of almost all its models under the slogan "Electricity is cheaper than oil."

The IEA emphasized, "The speed of transition to electric vehicles depends on economic viability," adding, "Automakers may be hurt by price cuts, but this is important for increasing electric vehicle market share." It further explained, "Due to intensified market competition and improvements in battery technology, electric vehicle prices are expected to decline over the next few years," and "The increase in exports by Chinese companies, which accounted for more than half of total electric vehicle sales in 2023, may increase downward pressure on prices."