Tesla Likely to Retain Electric Vehicle Sales Lead in 2024 as Prices Fall, Forecasts Latest Bloomberg Intelligence Study

London, 8th January 2024 – Tesla is likely to retain its annual global battery electric vehicle (BEV) sales crown in 2024 and throughout the decade despite China’s BYD overtaking briefly in Q4 of 2023. In contrast to Tesla and BYD, Volkswagen is no longer a medium-term contender, according to Bloomberg Intelligence’s (BI) latest Global BEV sector study.

BI’s research indicates that increased BEV rivalry is likely to spur intense price competition, pressuring margins. BI’s profit modelling suggests that internal combustion engines (ICE) will also dominate industry profit into 2030 as BEV markets remain fragmented and dominated by local brands, with Tesla the only real global player until legacy automakers launch next-gen, more scalable platforms in 2026-2027.

In the shorter term, BI forecasts BEV growth expectations may take a reality check in 2024 given consumer apathy over a lack of fast public chargers and high prices, though China, where BEVs have a similar price to ICE and infrastructure is more developed, is an exception.

Michael Dean, BI Senior Industry Analyst – Autos, Bloomberg Intelligence, said: “Our last industry report predicted that Tesla BEV sales would be overtaken in 2023-24, which happened in Q4 by BYD rather than Volkswagen, though we don’t expect BYD to lead on an annual basis.

“Our profit analysis indicates that even by 2030 ICE based powertrains, which includes hybrids, will continue to dominate industry earnings given legacy automakers will likely gradually ramp up production of next generation BEV platforms with proprietary software and enhanced battery technology towards the end of the decade.”

“Tesla and BYD will run neck-and-neck for BEV supremacy in 2024 though we anticipate consumer appetite for BEVs, bar China, will cool amid high prices, range anxiety and a lack of public fast chargers. In contrast, ICE profitability, including hybrids will remain dominant throughout the decade. Overall, this market dynamic doesn’t bode well for smaller BEV pure-plays.”

According to BI, Tesla’s new capacity, competitive pricing and new models should enable it to retain its annual sales crown, though success will rely on the ramp up of Cybertruck volume and the rollout of a cheaper Model 2 vs. BYD which has more limited opportunities for growth outside of China. While Volkswagen enjoys a leading 22% BEV market share in Europe, this dominance needs to be replicated in other regions, particularly China, where its BEV share in year-to-November was only 3.6% vs. 14% for the overall market and we expect it to lose market share until next-gen BEV platforms are launched in 2026-27.

Total European BEV sales broke 1.5 million units in 2022 though the firm does not see that doubling to 3 million units until 2026 given consumer apathy beyond first adopters and falling subsidies. BI anticipates a BEV market share of about 15.5% in 2023 to stall in 2024 though it notes BEV share is already at 30% or above in the Netherlands, Sweden and Norway and about 17% in the three largest European auto markets.

Michael Dean, BI Senior Industry Analyst – Autos, Bloomberg Intelligence, added: “Despite the hyperbole, our analysis indicates the global BEV sales mix will only reach 15% by 2025 rising to about 33% in 2030, with China remaining the dominant region. Europe will remain the no. 2 market, reinforced by emission legislation: we see growth slowing in 2024 with a flattish 16% market share rising to 19% market share in 2025 (or about 2.6 million units) vs. about 15.5% in 2023.

“The US and Japan will continue to lag, with the former’s BEV share expected to hit about 15% in 2025 vs. about 8% in 2023, though its trajectory is likely dependent on the result of the 2024 election. Japan will continue to leverage hybrid technology with a BEV market share only expected to hit 10% by 2030 vs. 2% in 2023.”

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Kate Burns / Saffron Wainwright / Seb Zickus
Citigate Dewe Rogerson
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Oktavia Catsaros
Bloomberg Intelligence
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