Car sales may sputter in 2024 amid EV policy risk: Research

The global automobile market is on track to recover to pre-pandemic levels this year and is expected to grow at a moderate pace amid a prolonged economic slowdown next year, according to South Korea’s leading automotive industry research house on Monday.

Global automobile sales are estimated to increase by 10.4% to 90.1 million units in 2023, compared to the previous year, thanks to improved supply chains of automotive components and parts, as well as reduced automobile inventories.

In 2024, their sales growth will likely slow to 2.4% on-year to 92.2 million units, with India and China to outperform, the Korea Automotive Technology Institute said in a research report.

However, the eco-friendly vehicle segment will likely face political headwinds as the US presidential election in November 2024 could lead to a change in Washington’s stance on electric vehicles.

“The eco-friendly vehicle market, especially battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), is highly vulnerable to government policies,” the institute said.

The likelihood of Europe implementing policy moves to contain China’s influence in the EV market could increase uncertainties over the segment, it added.

Combined sales of BEVs and PHEVs have jumped 37.6% to 13.9 million units in the first nine months to September from the previous year.

Assuming that their sales growth is maintained for the remainder of this year, their combined sales are expected to be in the range of 14 million to 14.5 million units for all of this year, the institute said.

It did not provide sales forecasts for both types of models in 2024.

Meanwhile, BNEF and Gartner, research houses, predicted that sales growth of both BEVs and PHEVs will moderate to around 20% next year.

Still, the prevailing view is that EVs will be automakers’ long-term growth driver.

Samsung Securities said that the forthcoming commercialization of Tesla's full self-driving software will fuel significant growth in the EV market, pushing global EV sales to over 100 million units in the long term.

DOMESTIC SALES

Domestic car sales are estimated to grow 5% on-year to 1.76 million units in 2023 and edge up 1.4% in 2024.

South Korea's automobile exports are expected to grow 1.2% in 2024, versus a 23% jump in 2023, according to the automotive research institute.

Write to Sungsu Bae at Baebae@hankyung.com
 


Yeonhee Kim edited this article.