Aftermath of the EV hype – permanent dip, small dent, or no crisis at all?

Aftermath of the EV hype – permanent dip, small dent, or no crisis at all?

The hype surrounding electric vehicles (EVs) in recent years has been undeniable, driven by a combination of environmental consciousness, government incentives, and technological advancements. However, as the dust settles, questions arise about the sustainability of this growth momentum and the long-term viability of the EV market.


The surge in demand for EVs, accelerated during the COVID-19 pandemic, painted a rosy picture of exponential growth and high expectations. Ambitious targets, such as Germany's aim to have 15 million EVs on the road by 2030, fueled optimism for a rapid transition to electric mobility. Yet, recent indicators suggest a different reality. Take, for instance, Tesla, the role model of the EV movement. In the first quarter of 2024, Tesla experienced an 8.5% decline in global electric car sales compared to the same period in 2023. The market capitalization of US and Chinese purely EV companies plummeted by 59% from their peak in late 2021, with a staggering 91% decline observed when excluding the two industry giants Tesla and BYD.

The US is seeing similar trends to those in Germany, prompting a reevaluation of targets. The Environmental Protection Agency (EPA) in the USA, for example, revised its projections, aiming for EVs to represent at least 35% of new vehicle sales by 2032, from 67% in earlier projections. However, amidst the gloom, there are glimmers of hope. Automakers are doubling down on their commitments to electrification, unveiling a slew of new models to cater to evolving consumer preferences. The Volkswagen corporation, for instance, has announced plans to launch over 30 new models over all their brands in the current year alone, aiming to bolster its electric vehicle sales.

Moreover, several manufacturers are gearing up to introduce affordable EV models priced between 20.000 to 25.000 euros by late 2024 or 2025. The narrowing price gap between used diesel and electric vehicles further incentivizes adoption. Furthermore, while Germany may see a dip in EV sales, the broader EU+EFTA+UK region witnessed a notable uptick, with sales increasing by 19% from approximately 210.000 units in the first two months of 2023 to around 250.000 units in the same period of 2024.

The transition to electric vehicles remains inevitable, albeit with potential delays. Major global powers, including the EU, USA, India, and China, remain steadfast in their commitment to EV adoption, setting ambitious targets for emission reduction and EV penetration. However, the road ahead is not without challenges. Companies must navigate regulatory uncertainties, technological barriers, and shifting consumer preferences. Some may falter, while others thrive through strategic partnerships and a well-established global network.

In conclusion, while the aftermath of the EV hype may present challenges, it also offers opportunities for innovation and adaptation. The trajectory towards electrification may deviate from initial projections, but the underlying momentum remains strong. By embracing change, fostering collaboration, and staying attuned to market dynamics, stakeholders can navigate the evolving landscape of electric mobility and drive towards a sustainable future.

EAC, with its offices around the globe and 30 years of experience, is the ideal partner to master such challenges. Investments requiring support can contact EAC partners Anna Ahlborn and Uwe Haizmann.