2023 seemed to be quite a promising year for the sector which saw a sharp increase in sales. Electric cars have even overtaken diesel cars and the indicators look very positive. However, hidden behind this growth arecomplex realities and much less optimistic for manufacturers.
Sales are on the rise, at least practically
If we look at the raw data, the first nine months of 2023 were much better than last year: electric car sales increased by 43%. However, growth is not everything, and other important factors must be taken into account to fully understand the phenomenon.
Tenors of the automotive industry such as General Motors, Ford or Mercedes are deployed big brake on their investments. Things aren’t any better for the Volkswagen Group: their EV sales are collapsing and production is slowing, with some models even temporarily halted.
Chinese industry, which is most often presented as very dynamic and competitive, is experiencing his first bankruptcies ; this is, for example, the case of the manufacturer Weltmeister.
Analysts from GlobalData, The Langston and JATO Dynamics point to a perverse effect that explains this imbalance: the confusion between sales AND supplies. Many manufacturers have actually delivered vehicles that customers ordered a long time ago. On the other hand, the interest of new customers is not the same as that of these soon to be adoptiveand remains stable. Result: lorders are falling.
The “valley of death” of the electrical industry
Thus, the sector appears to be entering a a state of stiffness, a critical period that analysts nickname: “The Valley of Death”. Bad term to describe a situation where production exceeds demand by more than necessary. The result: the second-hand market is experiencing a significant devaluation.
Stagnation of interest among new consumers in EVs a soon to be adoptive previously cited is a central factor causing this phenomenon. The obstacles to electric vehicle adoption generally remain the same: too high prices, insufficient autonomy and a charging network that is too underdeveloped.
The industry’s initial momentum and overall enthusiasm for EVs is not what it used to be. Especially since the forecasts assume that the range of manufacturers will not really expand before 2025, which will further delay the arrival of affordable vehicles on the market. So we should expect two rather difficult years for the sector with significantly slowed operations.
- Despite the increase in sales, the electric car sector is not in the best shape.
- A phenomenon largely caused by confusion between orders AND supplies.
- Production exceeds demand, which will inevitably lead to a slowdown in the industry in the coming years.