The slowdown in sales of electric cars has now moved beyond a mere concern, through a possibility and into accepted (and indeed locally observed) fact.
Figures from the Society of the Irish Motor Industry for March showed that registrations of new electric cars (not technically the same thing as sales, but a close corollary thereof) had fallen by a shocking 41.1 per cent compared with March 2023. In an overall car market that rose by 8 per cent so far in 2024, new electric car registrations fell by 14.3 per cent in the first quarter of this year.
This is not a local phenomenon. In the UK in December, the Society of Motor Manufacturers and Traders reported a massive 34 per cent drop in EV sales, and while there were some mitigating circumstances – December 2022 had seen a glut of EV deliveries as car dealers tried to clear a backlog of orders – nonetheless the figure raised eyebrows, not least because there was a commensurate uptick in sales of diesel-engined cars at the same time. An increase in diesel sales also occurred in Ireland in the early months of this year, albeit with smaller numbers.
So, is the electric car sky falling? No. Should we be worried? A little, yes.
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What’s happening now is that we’ve reached a point on the bell curve of new technology adoption where everything slows down, or temporarily comes to a halt. Electric car technology is the future – governments across Europe and the world have decided that it should be, after all – but even so, as described by Dell Technologies, we’ve now reached a point in sales where the early growth – driven by tech- and novelty-hungry early adopters – has come to an end, and now we have to wait for the ‘early majority’ and ‘late majority’ customers to come around to the idea.
This may take longer than anticipated, and these are substantial cohorts of buyers. Early and late majority buyers, combined, make up 68 per cent of the total market, according to Dell’s research. Dell’s description says early majority customers have “even higher expectations for ease of use than innovators and early adopters” and “consciously adopt an innovation and are not the early arrivals or the latecomers. Therefore, innovation takes longer to get to the target, ie taking longer to welcome new stuff into their day-to-day use.”
Those customers are going to be hard to convince, and while both battery technology and the public charging network have improved out of all recognition from their 2012 starting points, the fact is that for many people pure electric power still seems like something that won’t work for them.
[ Electric vehicles: why are sales falling?Opens in new window ]
[ Electric car sales in Ireland drop 14% despite rise in overall new car marketOpens in new window ]
It doesn’t matter if they’re – technically – wrong in that respect, and shouting at such people on social media, or smugly pointing out that you drove to North Africa and back in your EV won’t change their minds. They want to see conclusive proof that EVs are the right solution for their transport needs. Governments constantly tinkering with the taxpayer-backed incentives that encourage people into EVs doesn’t help.
Until then, electric sales may well flag, and we have no idea how long that might take. Indeed, it might well take until the 2035 cut-off date for the sale of cars with combustion engines, at which point whether you’re an early or late majority person, or a ‘laggard’ (the last of the holdouts) you’ll simply have no choice.
Between now and then, car companies wishing to stay in business are rapidly pivoting to try to keep these doubting buyers happy. Renault, for one, performed a dramatic volte-face when it announced this week that it will continue to offer both a fully-electric model and an equivalent with hybrid internal combustion power in every segment for the foreseeable future. That means that the much-hyped all-electric Renault 5 will be sold alongside a hybrid-engined Clio for some time yet. This comes hot on the heels of Renault’s abandoning of a stock-market float for its Ampere electric car specialist division, citing unfavourable market conditions.
Nissan has responded to the crisis in EV sales by slashing the price of its sharp-looking Ariya electric crossover in some markets. In the United States the Ariya has seen a price cut of $6,000 while in Ireland Nissan has introduced a base model of the Ariya, called the Engage, which offers a 404km range for €43,500. Tesla has – once again – chopped its prices, reducing the cost of a Model 3 and Model Y in the critical Chinese market, but oddly has chosen to increase the prices of the same models in the US. Ford, meanwhile, is offering as much as €18,500 off the price of a new Mustang Mach-E to American buyers, but that is an offer that applies only to cars preregistered as dealer demos.
Possibly the most dramatic response to the dip in electric car sales has been from Fiat, which has, according to the Italian newspaper Corriere Della Sera, been sounding out its suppliers about the possibility of retrofitting the current electric-only Fiat 500e with a petrol or compact hybrid engine, as a way of replacing the current, aged, 500 hatchback. This follows on from Fiat’s sister brand Jeep, which originally conceived the compact Avenger model as an electric-only offer, but which already has a petrol-powered version on sale, and more hybrid variations to come.
[ Declining electric car sales: ‘depreciation is wild at the moment’Opens in new window ]
Even mighty Tesla is not immune. In the first quarter of this year Tesla delivered 386,810 new car globally, a fall of 8.5 per cent compared with the same period last year, and well below Wall Street’s expectation of more than 450,000 deliveries. The low 2024 figure has been exacerbated by shipping problems caused by the conflict in the Middle East, as well as problems with its factory near Berlin, where a fire set by environmental activists interrupted the factory’s supply of electricity. Tesla’s share price took something of a tumble in the wake of those figures.
In the face of such electric challenges, some are standing firm. Jaguar has confirmed that it will effectively cease the production of internal-combustion engined models in June, when it phases out the XE, XF, E-Pace, and F-Type, leaving only the F-Pace SUV still on sale alongside the all-electric I-Pace as we await the arrival of the first new-generation all-electric (and significantly more expensive) Jaguar models.
At Polestar, chief executive Thomas Ingenlath reckons that all the EV doubters are just digging a hole for themselves. Despite recent financial travails for Polestar, which has consistently missed sales and delivery targets, Ingenlath told the Daily Telegraph recently: “There’s an incredible threat and danger if you don’t embrace future innovation and believe in that technology – the electric drivetrains, the innovation in battery, the innovation in modern electronics and software. If you don’t participate in that and think you can wait, and customers are ready for it, it’s an incredible trap.”
So, who’s right? The Renaults and the Fiats, who are starting to cool on their electric ardour, and prepping to keep combustion engines around a while longer? Or the Polestars and the Jaguars betting the farm on batteries?
Well, perhaps there’s a simple answer to this. Even as it looks more and more likely that the European Union will hit Chinese carmakers with increased tariffs in November, in an effort to protect the European car industry from what are seen by some as unfair competitive practices, China’s BYD is investing in another seven huge cargo-carrying ships to help its massive electric car export drive, while rival SAIC (which owns the MG brand, among others) says it’s looking to buy or build 14 such vessels in the next three years.
Whether you’re an early electric car adopter or a laggard, China’s EV carmakers are still betting big. Even though both companies – BYD and MG – will launch new hybrid and plug-in hybrid models in the coming months, there’s no slowdown in EVs where China is concerned.
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