The recent deceleration in electric car sales has progressed beyond being just a worry, having evolved into a reality that is being locally noticed. According to the data from the Irish Motor Industry Society, registrations for new electric vehicles, which closely relate to sales, saw a staggering 41.1% drop in March compared to the same month in 2023. Even though the overall car market has seen an 8% increase in 2024, new electric vehicle registrations decreased by 14.3% in the first three months of the year.
However, this is not a localised issue. In the UK, the Society of Motor Manufacturers and Traders recorded a considerable 34% drop in the sales of electric vehicles in December. While some factors may have mitigated the situation, such as the large number of electric vehicle deliveries in December 2022 due to car dealers trying to shift a backlog of orders, these statistics have still raised significant concern and coincided with a revival in diesel car sales. There has also been a similar surge in diesel sales in Ireland, but on a smaller scale.
So, is the future of electric cars in jeopardy? Certainly not. Is there cause for concern? Somewhat.
The current situation reflects the typical process of adopting new technology where everything initially slows down or even comes to a standstill. Electric vehicles are undoubtedly the future – they have been declared so by governments worldwide, but as pointed out by Dell Technologies, we’ve hit a plateau in sales where the initial surge, led by early-adopters hungry for novelty and technology, has ceased. Now, it’s time to wait for the majority of early and late customers to embrace the idea.
This transition may take longer than expected, considering these categories of buyers make up a substantial 68% of the total market, according to Dell’s research. Dell explains that these majority customers have “even higher expectations for ease of use than innovators and early adopters” and “deliberately adopt an innovation without being overly hasty or slow. Hence, it takes a longer period for them to incorporate new elements into their regular usage.”
Persuading clients regarding the benefits and utility of electric vehicles (EVs) remains a challenge. Despite significant advancements in battery technology and public charging facilities since 2012, EVs appear unsuitable or unviable for many people’s transportation needs. The decrease in EV sales or instances of increasing overall car market sales minus EVs, doesn’t help this situation.
Even if critics may be technically incorrect, deriding them or boasting about one’s own EV experiences won’t alter their opinions. These individuals demand irrefutable proof of EVs’ efficiency. Inconsistent government policies and incentives, supported by taxpayers’ money to boost EV adoption, are not contributing to the solution.
As a result, there’s a possibility that EV sales may continue to decrease, with no clear indication of when this trend might reverse. Indeed, it might not be until the planned 2035 ban on fossil-fuel powered vehicles. This ban would remove the option for ‘late majority’ people or ‘laggards’ who resist EV adoption the longest, leaving them without an alternative.
Meanwhile, automobile manufacturers aspiring to survive in the market are swiftly pivoting to cater to these sceptical customers. Renault, for instance, recently shifted its strategy and announced its plan to continue providing both fully-electric models and hybrids in every category for an indefinite period. Consequently, the highly anticipated all-electric Renault 5 will be sold concurrently with a hybrid Clio for the foreseeable future. This strategy change followed Renault’s decision to cancel the initial public offering for its Ampere electric car branch, attributing its decision to adverse market conditions.
Facing a downturn in EV sales, Nissan has reacted by reducing the price of its fashionable Ariya electric crossover in selected markets. The Ariya has witnessed a $6,000 price decrease in the United States whilst in Ireland Nissan introduced a standard model, known as the Engage, which provides a 404km range for €43,500. On the other hand, Tesla also lowered its prices again, trimming the cost of a Model 3 and Model Y in the crucial Chinese market, however intriguingly decided to raise the prices of these models in the US. In parallel, Ford is providing up to €18,500 off the price of a brand new Mustang Mach-E to American customers, though this only applies to cars pre-registered as dealer demos.
Fiat’s response to the drop in electric car sales has been quite notable. As reported by Italian publication Corriere Della Sera, Fiat has been seeking advice from its suppliers about the feasibility of equipping the existing electric-only Fiat 500e with a petrol or condensed hybrid engine in order to replace the outdated 500 hatchback. This follows Fiat’s sibling brand Jeep, which had initially projected the compact Avenger model as an electric-only vehicle. However, Jeep already sells a petrol-driven variant and has more hybrid versions in the pipeline.
Even industry giant Tesla hasn’t gone unaffected. In the first three months of the year, Tesla delivered 386,810 new vehicles globally which is a slip of 8.5 per cent from the same period the previous year, well below analysts’ expectation of over 450,000 deliveries. The disappointing figure for 2024 was made worse by shipping interruptions arising from the unrest in the Middle East, as well as issues at its factory near Berlin where a fire initiated by eco-activists disrupted power supply. Following these events, Tesla’s stock price experienced a significant drop.
Despite looming electrical challenges, certain companies remain steadfast. Jaguar has made it known that it will essentially bring an end to the manufacturing of vehicles powered by internal combustion engines come June, when it discontinues the models – XE, XF, E-Pace, and F-Type. This will leave only the F-Pace SUV and the completely electric I-Pace available for purchase, while new, more costly electric models are being developed.
The CEO of Polestar, Thomas Ingenlath, believes that those doubtful of electric vehicles are simply setting themselves up for failure. Despite the recent financial difficulties faced by Polestar, resulting from their inability to meet sales and delivery goals, Ingenlath was quoted by the Daily Telegraph expressing his belief in the importance of pushing technological boundaries. This included adopting electric drivetrains and advances in battery technology, modern electronics, and software. He stated that choosing to be a bystander and hoping that customers will be prepared for these advancements is a risky path to take.
Who then, holds the correct stance? Is it Renault and Fiat, who are showing signs of losing their enthusiasm for electric innovations and planning to keep internal combustion engines in circulation for a while longer? Alternatively, could it be the Jaguars and Polestars – who are massively investing in battery technology?
Even as the European Union is poised to impose higher tariffs on Chinese car manufacturers from November, to defend the European car industry from perceived unfair advantages, China’s BYD is expanding its electric car export initiative by investing in another seven large cargo ships. Meanwhile, SAIC (proprietor of the MG brand among others) is purportedly planning to purchase or construct 14 such vessels in the following three years.
Whether you’re an early electric car enthusiast or trailing behind the new trend, China’s electric vehicle manufacturers show no signs of slowing down. In spite of each company – BYD and MG – set to reveal new hybrid and plug-in hybrid models in the forthcoming months, it is clear that the momentum in electric vehicles shows no signs of diminish in China.