Bumpy road Electric car market stalls as sector enters new phase

Elon Musk became the world's richest man by evangelising about electric cars and delivering them by the million. Yet in recent months his company Tesla has struggled to maintain its momentum: sales have dropped, and so has the share price.

- Jasper Jolly

Those struggles have become emblematic of a broader reckoning facing the electric vehicle (EV) industry. After the soaring demand and valuations of the coronavirus pandemic years, the pace of sales growth has slowed. The industry has entered a new phase, with questions over whether the switch from petrol and diesel to cleaner electric is facing a troublesome stall or a temporary speed bump.

Musk acknowledged the difficulties this week, telling investors: "The EV adoption rate globally is under pressure, and a lot of other auto manufacturers are pulling back on EVs and pursuing plug-in hybrids instead." The Tesla boss, of course, insisted that was the wrong decision.

The sales slowdown is real, however. Tesla and its nearest rival in EV volumes, China's BYD, have both reported lower sales. This year, Mercedes-Benz said it would delay its goal of becoming an EV-only brand by 2030. Across Europe, fully electric cars slipped to a 13% share of all sales, down from last year's 13.9%, while sales of hybrids which combine a battery with an internal combustion engine - rose to 29%, from 24.4%. In the UK, EVS accounted for 15.5% of total car sales in the first three months of 2024, only marginally up from the same time last year.