Key Takeaways
- Six automakers led the electrification charge in 2023, representing 60% of the light-duty battery electric vehicle market. Collectively, almost 1/3 of their light-duty vehicle sales were electric.
- BYD, a purely electric vehicle player, leads the charge with a record 3 million EVs sold worldwide. Volvo Cars phased out diesel-powered vehicles.
- Despite challenges, automakers are committed to ambitious ZEV targets, driving toward a fully electric future.
Automakers expand their global footprint
As the automotive industry continues to recover in a post pandemic economy, emerging trends point to a clear conclusion: the new direction of travel is purely electric. Around the world, electric vehicle (EV) sales outperformed the general light-duty vehicle market, signaling a shift in consumer interest and a positive outlook for the global EV transition.
Six automakers, BYD, Ford, General Motors (GM), Jaguar Land Rover (JLR), Mercedes-Benz and Volvo Cars, are at the forefront of this movement. As signatories to the Zero Emission Vehicles Declaration, these companies hold a significant portion of the global electric vehicle market, defined as battery-electric vehicles (BEV), fuel-cell electric vehicles, and plug-in hybrid electric vehicles, holding roughly 60% last year alone.
As detailed in Figure 1, pure-electric player BYD outpaced the traditional automakers, reaching 100% EV sales share in 2023, while Volvo Cars achieved 32%, followed closely by Mercedes Benz with a 20% EV sales share. United States based companies GM and Ford saw slight declines in sales, while JLR stayed static.
Figure 1: Global electric light-duty vehicle sales share by OEM (2022-2023)
Source: “EV Data Center,” EV Volumes, Accessed February 2024.
As a key player in one of the largest car markets in the world, BYD achieved a new milestone by selling three million EVs in 2023, an increase of nearly 1.2 million from the previous year. Seeing the potential for growth on a global scale, BYD targeted new and emerging markets and successfully witnessed a 334% surge in exports year-over-year. The automaker boosted its EV sales across 70 countries spanning 6 continents, and apart from its home market in China, Thailand, Israel, and Europe emerged as the top three markets where they established a strong presence.
Meeting a growing demand for electric vehicles, automakers continue to capture an increasing number of EV sales as appetite expands. Last year, Mercedes-Benz experienced the largest sales increase of the group, an impressive 44% jump fueled by the introduction of a new fully electric model in the last quarter of 2023. The EQS contributed to the more than doubling of EV sales in both the United States and Chinese markets.
In North America, GM successfully doubled their EV sales in the US and Canada despite production challenges for new Ultium EVs. Meanwhile, Ford maintained its position as the second-best selling brand after Tesla in the US, with a 19% increase in EV sales year over year.
Automakers drive towards an electric horizon
As part of long-term business strategies, automakers utilize phase-out dates and EV interim targets to institutionalize a zero-emission future. Many signatories remain ambitious for future deployment, but BYD led the way by announcing a full phase-out of internal combustion engines in 2022 and followed through by producing and selling only EVs in 2023. The company further targets tripling its EV market share in Europe by 2025.
An ambitious leader among traditional manufacturers, Volvo plans to sell only fully electric cars globally by 2030. In March 2024, the company made a significant step by producing its last diesel-powered vehicle, and in India, they aim to make a third of their car sales electric in 2024.
For some automakers, business decisions have led to the adjustment of interim electric vehicle targets, while still maintaining their long-term goals. Mercedes Benz, for example, pushed the interim target of achieving 50% EV sales to the second half of the decade and 100% BEVs into the 2030s, a delay of 5 years. Considering research and development, JLR modified its near-term approach and intends to launch four BEV models and more plug-in hybrids by 2026, instead of developing six BEVs as previously announced.
Although US automakers faced challenges in meeting their 2023 BEV production delivery targets due to delays and software issues, they are still forging ahead. GM paused its goal of producing 400,000 EVs in North America this year, but plans to make one million by the end of next. Ford delayed the start of its annual goal of producing 600,000 EVs to the end of 2024.
Manufacturing capacity expands for electric vehicles
Despite minor adjustments in delivery timeframes, automakers continue to make progress and invest in an electric future. On a global scale, BYD is actively expanding its manufacturing capacity worldwide and has plants in various stages of planning or construction, including facilities in Thailand, Hungary, and Brazil. To break into the North American market, they are additionally exploring new locations in the western Mexican state of Jalisco.
European manufacturers signal plans for the future with several investments. Volvo secured a €420 million loan from the European Investment Bank to develop a new electric car platform, while Mercedes-Benz plans to invest €40 billion into BEVs between 2022 and 2030. Together with Stellantis and TotalEnergies, Mercedes raised €4.4 billion in debt funding to build three gigafactories in Germany, Italy, and France. JLR invested £4 billion in a new battery gigafactory in Somerset, UK, with the goal of producing 40 GWh of battery capacity annually. It also converted the Slovakian Nitra plant for BEV production and other technologies, with a plan to invest £15 billion over the next five years.
Among North American companies, Ford is investing CAD 1.8 billion to convert Oakville Assembly, an existing production plant, into a Canadian hub of electric vehicle manufacturing, including vehicle and battery pack assembly. It also plans to transform its vehicle assembly campus in Cologne, Germany to become the home of the Ford Explorer for European customers.
GM plans to take advantage of Brazil’s new National Green Mobility and Innovation Program (MOVER) by investing $1.4 billion in electric cars over the next five years. The program provides new tax incentives for companies investing in decarbonization and new technologies, giving legal certainty to companies like GM to invest in an electric future.
Outside the “big six,” the Vietnam-based manufacturer Vinfast shows promising growth in the EV transition. They have committed $2 billion to build a new EV manufacturing facility in North Carolina with an annual production capacity of 150,000 EVs for the United States market by 2025. In addition, they have invested $500 million in another EV facility India, and plan to enter the Philippines as a top priority market.
