EV Market and Trends in 2023

Introduction

The electric vehicle (EV) market has been growing rapidly, with a "tipping point" in terms of consumer adoption. According to KBA, in 2022 plug-in vehicles (BEVs & PHEVs) sales accounted for 31.4% of all new vehicles sold in Germany, and the ACEA found that it makes up to 12.4% of new car registrations in the whole EU. With such a steep progression, our article aims to dive into the trends driving the growth of the EV market and what’s driving EV ownership in 2023.

Market Share and Adoption

While the sales are soaring, EVs only accounts for 1.6% of the total registered passenger cars in Germany, according to Politico. We are still far from the 5% market share "tipping point" that proved to be significant for wider EV adoption. In markets like Norway and China, EV market share has surpassed this threshold. With an increasing visibility of EVs on the roads, they are becoming more normal and easier for consumers to consider purchasing. Commercial vehicles, such as delivery drivers, may also contribute to this trend as they become more inclined to purchase EVs after experiencing them on the job.

Longer Range

Advances in battery technology have led to longer range for EVs. Research showed that the range tipping point for wide consumer adoption is set at around 469km. We can now see premium models like the Tesla Model S Plaid that, with a range of over 600 kilometers, have made a significant impact on consumer adoption by addressing the concern of range anxiety. As we progress on battery innovation, especially with the slow roll-out of solid-state batteries that seem to be the next frontier for EVs, we will probably witness significant improvement in battery performances.

Higher Availability of EVs

Production of EVs has increased from both legacy automakers and startups, and charging infrastructure has expanded. Tesla's recent price cuts have driven competition among automakers to lower their prices and make EVs more accessible to consumers. 2023 will see the release of new, affordable EV models from a variety of automakers. This increase in availability and affordability will likely drive further consumer adoption.

Better Charging Solutions

Firstly, advancements in charging technology, such as improvements of DC fast charging, have greatly improved consumer convenience.

Additionnaly, the German government recently approved the Master Plan for Charging Infrastructure II that aims at expanding the charging network and incentivizing private charging enterprise. It is focused on helping to accelerate the expansion of the charging network, to improve the digitalization of charging infrastructure and to avoid gaps in supply to support the electric car market ramp-up. As charging networks are expanding in 2023, we will see faster charging options for EV owners in Germany and lower range anxiety — first concern of first-time EV buyers.

Software-Defined Electric Cars

The concept of "software-defined vehicles" (SDVs) is becoming increasingly prevalent in the European EV market. Automakers like Volswagen and BMW set up expensive software units to develop platforms which aim to offer over-the-air software updates, cloud connectivity, and vehicle-to-everything communication. 2023 is promising regarding the progress of SEV technology and the externalities that can directly affect current EV users. It is expected to enhance the overall user experience, thus making EVs even more attractive to consumers.

Government Incentives and Regulations

Governments around the world have implemented a variety of incentives and regulations to support the growth of the EV market. Programs like the European Union's Zero-Emission Vehicle mandate have had a positive impact on consumer adoption. Emissions standards have also played a role in pushing automakers to produce more electric options. However, the Government grants for EV-buying such as the Umweltbonus are decreasing in both amount and coverage — but with the recent price cut, it actually offsets the impact of the reduced bonuses.

Electric SUVs

2023 is predicted to be the year of the Electric SUV, with a parade of cargo-friendly and affordable options set to hit the market in Europe. Affordable Electric SUVs set to launch in 2023 include the Nissan Ariya, Kia EV9, and the Vietnamese manufacturer VinFast's VF 8. The luxury Electric SUV market is also expected to grow, with models from Hyundai, Polestar, Mercedes, and potentially a large electric Volvo. While more options will be available in 2023, supplies will still be tight and prices will stay elevated, especially for start-up automakers still facing challenges in scaling up production.

Conclusion

In 2023, the EV market is expected to see continued growth and adoption driven by factors like longer range, higher availability, faster charging, software-defined vehicles, government incentives and regulations, as well as the rise of Electric SUVs. The potential for continued innovation and growth in the EV market in the coming years is immense — with great new models and exciting features planning on being released. This shift towards sustainable transportation will have a positive impact on the environment and the future of mobility, and we are proud to be part of it!