[SMM Analysis] A Hundred Boats Compete, the Brave Forge Ahead—2024 Annual Review of the NEV Market

》View SMM Cobalt and Lithium Product Prices, Data, and Market Analysis

》Subscribe to View Historical Price Trends of SMM Cobalt and Lithium Spot Products

Global: Global NEV Sales in 2024 Are Expected to Reach 17.15 Million Units, Up 20% YoY

From January to November 2024, global vehicle sales reached 82.01 million units, with NEVs accounting for 16.07 million units. The NEV market share during this period reached 19.6%, with pure EVs accounting for 12.6%, plug-in hybrids for 7%, and hybrid vehicles for 6.4%, showing an increase in the share of hybrid electric vehicles. Global NEV sales in 2024 are expected to reach 17.15 million units, up 20% YoY.

Market-wise, the Chinese market in 2024 is expected to show a trend of initial decline followed by recovery. In H1, the Chinese market was affected by the continued impact of subsidy reductions, coupled with automakers facing price-cutting pressure, leading to a general wait-and-see attitude among consumers and weak market sales performance. However, starting in H2, with the intensification of subsidy policies, NEV sales showed strong growth, exceeding expectations. In contrast, the European market underperformed expectations due to the cancellation or reduction of subsidies in several countries, combined with the early stages of anti-subsidy measures and local industry chain development, resulting in a near stagnation of electrification and almost no sales growth. The US market also saw a slowdown in electrification trends. Affected by the FEOC Act, some models lost subsidy eligibility in 2024, and supply constraints of affordable new models led to a performance below expectations in the US market.

China: Sales Expected to Exceed 12 Million Units, Up 36% YoY

In 2024, China's NEV sales are expected to reach 12.85 million units, with domestic sales accounting for approximately 89% and exports for about 11%. The penetration rate of NEVs in China is expected to reach 45%.

In 2024, China's PHEV sales are projected to reach 5.215 million units, and EV sales are expected to reach 7.634 million units. The share of PHEVs is expected to increase significantly, rising from 29.5% in 2023 to 40.6% in 2024. The PHEV share is expected to continue increasing due to the following reasons: 1. Plug-in hybrid models have proven capable of achieving "price parity with gasoline vehicles," eliminating the price disadvantage compared to fuel vehicles, creating a price advantage over pure electric models, and expanding their technical advantages over fuel vehicles. 2. Mainstream consumers' concerns about the safety and driving range of pure EVs remain unresolved, making plug-in hybrids a good transitional option to alleviate anxiety.

In terms of China's NEV model structure in 2024, SUVs are expected to account for 47%, slightly less than sedans. Among sedans, small NEVs represented by A00-class, A0-class, and A-class vehicles are expected to account for 28%, showing a decline compared to 2023, while B-class and C-class sedans are expected to account for 22%, showing a significant increase compared to 2023.

Independent Brands and Emerging Brands Shine: In 2024, supported by continuous policies and a significant increase in consumer demand, the domestic automotive market is expected to experience unprecedented prosperity, with many automakers achieving record-breaking sales. BYD is expected to continue leading the market, with annual vehicle sales reaching 4.272 million units, setting a new sales record. Emerging automakers are also expected to reach new heights, with many achieving double-digit growth in sales. Li Auto is expected to secure the top spot again with sales exceeding 500,000 units, followed by Hongmeng Zhixing with 445,000 units, and Leap Motor delivering nearly 300,000 units, ranking third. Xiaomi Auto, as a new entrant, is also expected to perform well, growing from 7,500 units in its first month of delivery to over 20,000 units within six months, surpassing its annual target of 130,000 units.

Europe: Sales Expected to Reach 2.81 Million Units in 2024, Down 4.7% YoY

Europe has long been the second-largest NEV market after China. However, in 2024, NEV sales in Europe are expected to decline YoY, primarily due to reduced subsidies for NEVs in many European countries, with some even canceling certain subsidy policies, directly impacting consumers' willingness for car purchases. Additionally, from the perspective of the NEV market structure, European local automakers, constrained by concerns over ensuring profit margins, lack the ambition and capability to produce affordable entry-level EVs. Chinese emerging automakers' high-volume models face no competition in Europe. However, in July 2024, the European Commission announced plans to impose provisional anti-subsidy tariffs on EVs imported from China starting July 4. BYD, Geely, and SAIC will face tariffs of 17.4%, 20%, and 38.1%, respectively. Chinese producers that cooperated but were not sampled will face a weighted average tariff of 20.8%, while non-cooperating companies will face a tariff rate of 37.6%. The implementation of these tariff hikes significantly impacts the export strategies of many Chinese automakers, increasing the difficulty for Chinese EVs to enter Europe.

US: Sales Expected to Reach 1.62 Million Units in 2024, Up 11% YoY

In 2024, the US NEV market is expected to show some growth, but the growth rate is expected to slow, with NEV penetration reaching 12%. Previously, the Biden administration's Inflation Reduction Act reinstated a maximum $7,500 tax credit subsidy for EV purchases, supporting the US electrification transition. However, in 2024, the FEOC Act is expected to impact the market, with some models losing subsidy eligibility, affecting the growth of the US NEV market.

SMM believes that 2024 was a year of both opportunities and challenges for the NEV market. On one hand, the implementation of various subsidy policies effectively stimulated consumers' enthusiasm for car purchases and replacements, providing ample room for NEV development. On the other hand, intense market competition and increasingly diverse consumer demands posed higher requirements for automakers. Looking ahead to 2025, with the continued intensification of subsidy policies, domestic NEV sales are expected to maintain a growth trend. However, given the limited incremental market space domestically and the challenges of exporting due to overseas tariff hikes, market competition in the NEV sector is expected to become even more intense, presenting new challenges for automakers!

SMM New Energy Research Team

Cong Wang 021-51666838

Xiaodan Yu 021-20707870

Rui Ma 021-51595780

Ying Xu 021-51666707

Disheng Feng 021-51666714

Yujun Liu 021-20707895

Yanlin Lü 021-20707875

Zhicheng Zhou 021-51666711

Haohan Zhang 021-51666752

Zihan Wang 021-51666914

Xiaoxuan Ren 021-20707866

Yushuo Liang 021-20707892

Jie Wang 021-51595902

Yang Xu 021-51666760

Lianting Yang 021-51595835