Goldman Sachs predicts that the EV market will slow down, with HEVs and PHEVs rising to challenge the dominant position

According to the financial news app Smart Finance, Goldman Sachs' research report on the electric vehicle (EV) industry points out that the EV market is at a turning point, with hybrid electric vehicles (HEVs) and plug-in hybrid electric vehicles (PHEVs) bringing strong competition to the EV market.

In Goldman Sachs' pessimistic scenario, although the bank believes that the EV market is currently slowing down, it still expects EV sales to increase by 21% year-on-year in 2024. However, this expectation may not align with the actual market development. According to the report, the true trend in the market may be a 2% decline in sales, which could lead to an oversupply situation in the entire EV supply chain.

The report shows that since early 2024, the growth of the EV market in Europe has shown signs of stagnation. This is attributed to three factors: the capital cost issue of EVs caused by the depreciation of used EVs, poor predictability of government policies, and a shortage of fast charging stations. These issues have changed consumer preferences, leading them to turn to HEVs and PHEVs.

Furthermore, the report points out that as major governments reduce subsidies and factors such as operational cost advantages (such as fuel savings), EVs are approaching an economic viability turning point. On the other hand, the decline in prices of used EVs has raised new concerns.

Although it is difficult to predict when the prices of used EVs will bottom out, battery innovation is a bottleneck. It is understood that batteries currently account for 30-40% of EV costs. Consumers believe that future battery performance will surpass current batteries, so the stabilization of used EV prices may not happen so quickly.

Additionally, as EV penetration accelerates, the issue of fast charging station infrastructure becomes more prominent. For example, automakers like Nissan and Mitsubishi have stated that concerns about range and charging infrastructure increase when people return home or travel to rural areas.

In conclusion, Goldman Sachs concludes that all the above reasons are causing manufacturers and consumers to turn to HEVs and PHEVs. In the United States, sales of HEVs and PHEVs are accelerating amidst the slowdown in EVs, with growth over the past few months surpassing that of EVs.

It is worth mentioning that the report also points out that the market reacts differently to different types of electric vehicles.

In India, the downward trend in EV sales has not appeared. The dashboard of the Indian government's Vahan portal shows that registrations of two-wheeler EVs are on the rise, although three-wheelers and four-wheelers have slightly declined.

Data shows that in January 2024, EV registrations in India were 144,877, slightly decreasing to 141,382 in February, but as of March 30, this month's data shows a 32% increase, reaching 186,143 vehicles.

However, globally, Goldman Sachs expects global sales of hybrid electric vehicles to exceed expectations by 1 to 2 million units.

Toyota officially stated that the profit margin of HEVs is higher than that of gasoline engine vehicles. The report believes that the additional costs of HEVs can be offset by fuel savings and higher resale prices. For the industry, the economic benefits of HEVs are higher profit margins, relatively lower capital costs, and high confidence in used car prices The report also added that if lower EV costs are achieved by 2030, the advantages of EVs will once again become the focus of attention