Global EV sales jump 24% in June though North American market struggles, research firm says

Global electric and plug-in hybrid vehicle sales increased 24% year-over-year in June to 1.8 million units, driven by significant growth in China (+28%) and Europe (+23%) due to sustained momentum, incentives, and the availability of cheaper EVs. Conversely, North American sales declined 9%, with the US down 1%, marking the first time the region has lagged, primarily due to earlier-than-anticipated tax credit cuts and a 25% import tariff. Chinese brands are notably gaining market share globally, and China's sales are anticipated to see a strong rebound in the second half of the year as more subsidies become available.

Analysis

Global electric vehicle sales demonstrated significant but geographically divergent growth in June, increasing 24% year-over-year to 1.8 million units. This expansion was primarily fueled by strong momentum in China and Europe, where sales jumped 28% and 23% respectively, supported by government incentives and the growing availability of affordable models. In stark contrast, the North American market experienced a 9% contraction, with U.S. sales falling 1%, attributed to the earlier-than-anticipated phase-out of tax credits. This downturn caused North America's sales volume to fall behind the 'rest of the world' category for the first time, which itself surged 43%. The competitive landscape is intensifying, with Chinese brands like BYD gaining market share in Europe and emerging markets, challenging established players such as Volkswagen and Renault. While there are concerns about a potential slowdown in China due to expiring local subsidies, analysts anticipate a significant boost in the second half of the year as more government support is expected, whereas the outlook for automakers in the U.S. is clouded by a 25% import tariff that has led many to withdraw their 2025 guidance.

Key Decisions for Investors

• Investors should assess automakers' geographic revenue exposure, potentially favoring those with strong market positions in Europe and China over those heavily reliant on the policy-challenged North American market.
• The rapid market share gains of Chinese EV brands in Europe and emerging markets represent a key competitive threat to incumbent Western automakers, warranting close monitoring of market dynamics.
• The outlook for H2 2024 is heavily contingent on Chinese subsidy policy, which could act as a major catalyst for sales volumes if new incentives are confirmed.
• Consider the significant risk posed by the 25% U.S. import tariff on automakers importing vehicles into the world's second-largest car market, and watch for any signs of the potential trade deals mentioned.