A few days ago, the Economist Intelligence Unit (EIU) released the global auto market outlook for 2025, pointing out that the global auto market will grow in a more benign way in 2025, and global new car sales are expected to reach 97.
2 million, a record high.
Electric vehicles will remain the best-performing market segment, with sales likely to grow by about 16 per cent to 19.
4 million units.
Growth continues but slows, and subsidies and incentives provided by policy makers around the world for electric vehicles have contributed to the rapid development of electric vehicles.
Its share of new car sales surged from 3.
4% in 2019 to 21.
8% in 2023.
However, with the early adopter market saturation, the market turning to less enthusiastic mass consumers, and a higher base of comparison and other factors, the growth rate of electric vehicles is restrained.
At present, the growth of electric vehicle market tends to slow down.
However, government tax breaks for electric car buyers and discounts offered by carmakers will support growth in electric vehicle sales, and the electric vehicle market in 2025 is still something to look forward to.
Trade conflicts affect the stability of the supply chain, and the development of electric vehicles is affected by technological innovation, cost control, market demand and other factors, among which the conflicts of trade barriers between China, the United States and China and Europe will hinder market growth.
This negative force is likely to be more “powerful” in 2025.
In the United States, the requirements for the local production of electric vehicles tend to be strict.
Under the inflation reduction Act (IRA) passed in 2022, the US plans to exclude electric vehicles made using key Chinese minerals from tax credits as an incentive for buyers.
The same restrictions already apply to electric vehicles and batteries from all “foreign concern entities” (FEOC) (China, Russia, Iran and North Korea).
In addition, the United States and the European Union have raised import tariffs on Chinese electric vehicles.
In May 2024, the Biden administration of the United States raised import tariffs on Chinese electric vehicles from 50% to 100%, and on Chinese electric vehicle batteries from zero to 25%.
In August 2024, Canada followed suit, imposing high tariffs.
On October 29, 2024, the European Union released the final plan (final version) of countervailing investigation on electric vehicles made in China, announcing that on the basis of the original tax rate of 10%, an additional countervailing duty of 35.
3% would be levied on electric vehicles imported from China for a period of five years.
These measures will significantly increase the cost of sales for Chinese and western electric car makers with production operations in China.
In addition, as a countermeasure, China is likely to increase export restrictions on key minerals needed for electric vehicles and batteries.
In such a global economic environment, the report argues that global electric vehicle manufacturers will face unstable and volatile input costs.
Chinese and western carmakers will also be forced to build new car or parts production plants or use trade agreements with third countries to evade tariffs to diversify their supply chains.
In short, the supply chain of electric vehicles will continue to extend, but it also faces the risk of being further “broken” by geopolitical influence.
Increased competition, but increased profitability, the risk of supply chain “break” and the trend of increasing input costs have brought great challenges to automakers, and competition in the industry is still intensifying.
Western carmakers continue to hover between old and new technologies, and foreign carmakers in China, including Volkswagen, will continue to face a decline in market share in China in 2025 and beyond.
The failure in the Chinese market will also affect the achievement of some carmakers’ ambitious goals related to the share of electric vehicle sales.
Volvo, for example, had planned to achieve its goal of selling 50 per cent of its cars in 2025, but only 16 per cent of sales in 2023.
On the one hand, Chinese electric car manufacturers face the risk of rising trade barriers, on the other hand, they continue to go to sea.
BYD, for example, plans to achieve its goal of selling 1 million electric vehicles in markets outside China by 2025, with the help of new plants in Brazil and Hungary.
Strong growth in global electric vehicle sales, coupled with falling commodity prices of battery raw materials such as lithium, have pushed electric vehicles on a profitable path.
Traditional carmakers are likely to join the profitable ranks in 2025.
As early as 2022, the chief financial officer of BMW said that its electric vehicles would be more profitable than fuel vehicles in 2025, but that milestone may now be achieved in 2026.
GM and Strantis say they are on track to make electric cars profitable by the end of 2024.
Even so, however, electric vehicles will still be less profitable than fuel vehicles, as the investment required for the transformation of electric vehicles will burden the financial position of many carmakers in 2025.
Artificial intelligence will be integrated with automobile acceleration, and artificial intelligence will be deeply integrated with automobile in 2025.
Mercedes-Benz will introduce an AI-based “super assistant” in every car it produces.
Kia’s new model will be equipped with a new ChatGPT-based voice assistant.
Volkswagen has integrated ChatGPT into an IDA voice assistant to help drivers control infotainment systems, navigation and air conditioning, or answer basic questions BMW is testing personal assistants driven by the Alexa large language Model (LLM), which can explain the vehicle’s functions to drivers.
Meanwhile, automakers continue to develop subscription services.
They are trying to get car owners to pay monthly for functions such as smartphone integration, driving assistance and in-car temperature control.
Audi’s new A3 model, to be launched in 2025, will offer subscriptions ranging from one month to three years.
Mercedes-Benz and Volkswagen will seek subscription services for heated seats, advanced self-driving features and even extra electric power.
But whether car owners are willing to pay for it is another question.
, return to the first electric network home page >.
