China is electrifying its car parc at triple the US rate
China 1 in 3
Chinese electrified passenger vehicle sales continue to pull ahead of the rest of the world with EVs, including plug-in and conventional hybrids, leaving dealership lots up by more than 33% in the first quarter of this year compared to 2023.
At 2.1 million units in Q1 2023, Chinese buyers drove away with 43% of EVs sold worldwide over the three month period. Every third passenger vehicle sold in China in Q1 was an EV.
In the US, unit growth accelerated in March from the lackluster pace of January and February but the country’s Q1 rate of expansion of under 28% still lagged well behind that of China. And unlike the latter, EV penetration rates in the US stayed steady at just over 17%.
The opposite pattern played out in Europe, which after a strong start to 2024 went into a decline in March that dragged down year-on-year growth rates to a sedate 8% for the first quarter.
Europe’s slowdown also put the brakes on EV unit growth globally, which recorded a pace of 23% year-on-year at 4.8m for the quarter.
HEV in the USA
When measured in terms of GWhs of battery power rolled onto roads in newly sold vehicles (which provides a clearer picture of how fast the car parc is electrifying), US underperformance stands in starker contrast.
At 82.6 GWh combined battery capacity, Chinese EV buyers rolled 34% more power-hours onto the country’s road in Q1 2024 than the same period the year prior. That compares to 23.9 GWh and 11% growth in the US and under 8% expansion in Europe to 36.4 GWh.
The gap between GWh deployment and EV unit sales growth in the US is explained by a sharp slowdown in full electric vehicle (BEV) sales.
In the US, BEV sales increased by half-a-percent year-on-year versus a 50% jump in quarterly shipments of plug-in hybrids (PHEVs) and a similar rate of growth for conventional hybrids (HEVs), which have inherently smaller batteries.
While the growing popularity of PHEVs has also long been a feature of the Chinese market, it’s now becoming a feature of the US market too, as Q1 data shows.
Adamas take:
The much-vaunted slowdown of the US electric vehicle market can mostly be blamed on a dramatic swing towards plug-in and conventional hybrids at the expense of full electric cars; most notably Tesla’s aging model lineup.
The US EV market’s performance remains heavily geared towards and reliant on the sales growth of Tesla. Even with a 17% year-on-year drop in sales in Q1, the Texas-based EV pioneer was still responsible for half of BEV volumes in the country. As such, Tesla’s malaise is the US market’s malaise and vice versa.
*Note: To produce the most accurate and granular results, Adamas Intelligence analysis is based on end-user vehicle registrations, insurance data and retail sales, not extrapolations from reported production, wholesale car markets, sales to dealerships or preliminary sales projections.
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