Market Insight: BEV growth slows

WHILE battery electric vehicle (BEV) sales are rising overall, a cooling in demand has been reported from major global markets but it is unclear if the cause is buyers waiting for improved technology, irregular supply issues, cost of living pressures or the market-defining dominance of Tesla.

In the United States, data published by Argonne National Laboratory goes against the BEV slowdown narrative, suggesting that sales are stronger than ever, with a 56 per cent total growth rate in the third quarter of this year.

BEVs will land at about eight per cent of all new US vehicle registrations in 2023, or more than a million units.

However, not all BEV manufacturers in the USA are selling everything they can make.

According to energy transition journal Heatmap News, Ford CEO Jim Farley recently announced reducing production of two BEVs, the F-150 Lightning and Mustang Mach-E while delaying spending on elements of BEV research and development.

General Motors has struck problems with battery production for its next-gen SUVs and utes, and its most affordable electric model – the recall-ridden Chevrolet Bolt BEV – was to be axed at the end of this year but has recently been given a stay of execution with further updates announced.

Heatmap News also reported that in the USA, Tesla has reduced its prices by up to 20 per cent in response to competition from mainstream car-makers and start-ups such as Rivian, Lucid and Fisker.

According to Automotive News, Tesla's US sales growth eased off significantly in September, with 51,500 registrations, around six per cent higher than last year but relatively low by 2023 standards.

Meanwhile, Tesla’s BEV competitors in the US market more than doubled registrations year-over-year in September to in excess of 46,500 units.

As for Europe, despite a 47 per cent sales increase during the first nine months of 2023, increasing interest rates and a subdued market are said to be slowing demand, with Volkswagen's BEV order intake half what it was last year, according to Reuters.

Reuters also cited the average BEV’s 33 per cent higher price over internal combustion engine (ICE) equivalents and the lack of affordable BEVs would eventually stall the steep sales growth, which has been boosted by early adopters and corporate fleets.

Meanwhile in Australia, BEV market share does not appear to be continuing its strong upward trajectory, although monthly deliveries are far more consistent than they were last year.

Despite Australian BEV sales being up significantly on last year, according to industry statistician VFACTS, in the third quarter of 2023 the BEV sales share was up just 0.67 per cent up on the first quarter of this year. 

Then again, BEV volume in the September quarter was up by 5255 units compared with figures to the end of March.

In terms of monthly results, in June BEVs accounted for 8.8 per cent of all new vehicles sold in Australia compared with 7.0 per cent in July, 6.4 per cent in August and 8.0 per cent in September.

October and January BEV share figures were joint-lowest so far in 2023 at 5.7 per cent.

Uptake of BEVs and hybrids is eroding the market share of purely internal combustion engine (ICE) vehicles in Australia, down 5.2 per cent in the third quarter compared to sales volume from January to the end of March this year.

However, it is worth noting the sharp rise in BEV sales over the last 12 months. In VFACTS figures year-to-date to the end of October, 71,800 EVs were delivered in 2023 against just 23,869 for the same period last year, a 200 per cent increase.

It could be argued that this rapid rise is difficult to sustain, at least without a flood of viable BEV alternatives in Australia’s most popular new-vehicle segments.