Electric vehicle sales are projected to rise in 2024 but analysts are dialing back expectations as the automotive industry grapples with challenges limiting consumer demand and charging infrastructure growth.
J.D. Power now forecasts U.S. electric vehicle market share will hit 12.4% in 2024, up from 7.6% in 2023. While that represents a gain of 63%, the rate is down 0.8 percentage points from the firm’s original prediction.
Last year, EV sales grew at a 50% pace, hitting one million units for the first time. However, much of that growth was driven by Tesla, who accounted for more than half of the increase, whereas the second and third-place contributors, BMW and Mercedes-Benz, were responsible for only 8% and 7%, respectively.
This year is expected to be more challenging for electric vehicle companies than 2023 for multiple reasons. One of the key challenges facing the segment is accessibility in terms of both convenience and price. Most battery-powered car models today come with premium price tags, leaving few affordable choices for the mass market segment.
Furthermore, although the U.S. has tens of thousands of chargers across the Supercharger network and other providers, the supply has already been outpaced by demand in many highly-populated areas, while in rural zones, infrastructure expansion efforts have largely just begun.
These two issues heavily limit the number of potential consumers, thereby putting a bottleneck on EV sales. Taking into consideration the fact that Tesla has largely saturated the market, it seems automakers will be effectively forced to compete with their rival’s scraps until they can break into new markets.
