Viewing the trend in 2023, according to the global Q3 NEV market situation

By Jeff Lee 2022-12-20

In a blink of an eye, we are approaching the end of the year. A few reasons contributed to the decreased scale of the global car market this year, including the chip shortage from the year before the last till the following year, the rising cost of raw materials, the appreciation of US dollar, the Shanghai city lockdown causing “unchained” global supply chain, the Ukrainian war affecting material supplies, etc. However, the new energy car market has been blossoming with an estimated 70% growth since last year! This trend clearly states that EVs will sweep the auto market in a few years!

According to the global NEV (including BEV, PHEV, and FCV) Q3 sales report by renowned market intelligence provider TrendForce, Q3’s total sales hit 2.87 million units, scoring consecutive record numbers and a YOY growth of 70%, of which BEV took up 75% and PHEV 25% (FCV only sold ~10k units). Undoubtedly, BEV will be NEV’s mainstream, of which Tesla’s market share sits at no.1 with 16%. However, BYD, this year’s rising star, came in at 12% with a YOY growth of 182%. The BEV sales competition between the top two resulted in a sub-10k units margin for two consecutive quarters. Aside from the first and fourth place, Tesla and VW, all the other top-ten BEV entries are Chinese self-owned brands. Interestingly, the tenth brand was MG, which is available in Taiwan market. Thanks to its ventures in SE Asian and European markets, the company was able to squeeze into the top ten list. Although Hyundai and Kia performed quite well in BEV market these years, they didn’t enter the top ten list this time. Additionally, BYD has been dominating the PHEV market, with its Q3 sales nearing 280k units, 20k more than its BEV sales, and 39% market share. Mercedes, who was in second place, only has a market share of 6.7%, which is a large gap between that of BYD. In conclusion, we can roughly map next year’s global auto industry trends with Q3’s NEV market situation…

 

  • The two largest markets, China and the US will have steady growth in EV markets with at least 30% increases. Due to its relatively under developed EV market, the market potential of US in the next few years will be more noticeable.
  • The European EV market will see a moderate 15% growth next year due to less purchase subsidies. However, their market growth still has a chance to hit 20% due to Tesla’s production capacity expansion in Berlin and Chinese self-owned brands’ successive outlets deployment & CBU export to the European market to test the waters.
  • In other regions around the globe, India and SE Asian countries possess stronger growth momentum and will be the next crucial EV markets for global carmakers. Their market growth next year will likely surpass the markets mentioned above.
  • Global passenger EV (BEV+PHEV) market this year is about to surpass 10 million units. Even potential chip shortage and battery raw materials supply chain issues will continue to impact global car production, the robust market demand will still push the market size to 13 million units according to my prediction. Plus commercial EV sales, it will be highly possible to surpass 15 million units in total. Following the trend of CAGR ( Compound Annual Growth Rate ), EVs’ annual sales can increase to 25 million units by 2025.
  • With more widely deployed public charging stations and higher-ranged power batteries, we will see increasingly noticeable differences between the sales ratios of BEV and PHEV in the future. The current 3:1 ratio will rise further after many new BEV models hit the market in 2025.

Comparing this year’s Q1 and Q2 NEV sales figures, 2 million and 2.19 million units, we became aware that how astonishing Q3 sales increase was, not to mention last year’s 6.47 million annual sales. Most of the change came from the drastic change in the Chinese market, which was the reason why major automakers were striving to make strategic adjustment of the business operation in Chinese market this year. If EV product plan and sales result are not as expected in Chinese market, the negative effect will spillover to other major markets in the next few years as a warning sign of failure for auto brands while entering the EV era.