Consumers 'less open' to buying EVs – S&P
Appetite to switch to all-electric buffeted by macroeconomic headwinds
The share of consumers in major global auto markets open to purchasing an EV dropped to 67pc in 2023, from 71pc in 2022 and 86pc in 2021, according to a survey of EV owners and potential buyers by consultancy S&P Global Mobility.
The higher levels of interest in EV buying in 2021 may have been driven by the availability of new models and the pro-EV push by the Biden administration in the US. But cost-of-living concerns and sustained high interest rates are now having an impact on consumers' desire to purchase such vehicles, the report finds.
Almost half (48pc) of the 7,500 respondents globally consider EV prices to be too high, even though they recognise that EVs carry a price premium over conventional ICE vehicles.
"Pricing is still very much the biggest barrier to electric vehicles," says Yanina Mills, Senior Technical Research Analyst at S&P Global Mobility.
Only 42pc of global survey respondents are considering an EV for their next vehicle purchase, and 62pc are waiting until the technology improves before purchasing a new vehicle, the survey finds.
Mainland China is the exception, where the report found EVs are increasingly attracting mainstream car buyers. In the third quarter of 2023, BEVs and PHEVs accounted for 34pc of new light-vehicle (LV) registrations.
The market in China is growing largely because of the wider availability of competitively priced EVs and the rapid expansion of public fast-charging infrastructure.
Despite the current headwinds, S&P Global Mobility expects the global EV share of light vehicle sales to rise to between 39pc and 50pc by 2030, from around 17pc in 2023. The growth will come as improved policy regimes and the availability of cheaper models encourage uptake.
"Ultimately, a widening gap between auto industry investments in EVs and ICE vehicles means that technology and economies of scale will improve faster for the former, trends that will whittle down the 'BEV premium' for prices," the report predicts.
Europe and mainland China will be at the forefront of adoption, followed by the US. Adoption is expected to be slower in emerging economies, owing to vehicle affordability and power infrastructure challenges, although lower-priced Chinese EVs could accelerate adoption in price-sensitive markets, the report finds.
Lithium supply represents a risk to steep EV adoption, especially in the latter half of the decade when S&P Global Mobility fears a surge in demand could start to outstrip supply.
Supply of other key battery raw materials such as cobalt and nickel could also fall into a supply deficit later this decade, S&P Global Mobility believes.
But new lithium extraction methods currently being developed could help balance the lithium market, and emerging alternatives to nickel-rich battery chemistries could moderate the impact of higher mineral prices on battery costs.
The report notes that the emergence of solid state battery technologies also has the potential to offer real commercial alternatives in the battery market that could reduce raw material demand — although it says battery manufactures claims of energy density breakthroughs should still be treated with caution.