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Electric Vehicle Market Update: H1 2024 in Review
Global electric vehicle sales up in H1 2024
While sales looked rough early in the year looking at numbers by a month-on-month perspective, they were up significantly year-over-year. According to EV market research firm Rho Motion, January sales dropped by 26 percent from December to 1.1 million vehicles sold, only to fall another 25 percent month-over-month in February to 0.8 million vehicles sold.
However, taking a look at year-over-year shows that combined EV sales for the first two months of the year were actually up by 32 percent over the January/February period in 2023.
Sales pushed past the million mark once again in March and the months that followed. By the end of May, more than 5 million EVs had been sold around the world in the first five months of the year. Compared to the same period last year, the number of EVs purchased rose by 20 percent.
This growth isn't even across the board, though. One of the key trends to watch in this year’s EV market landscape is the marked difference in growth trajectories for the three major regional markets.
2024 EV market trends in China, North America and Europe
China continues to lead the world in EV adoption rates, based on Rho Motion’s data. The Chinese EV market grew by 31 percent in the January to May period compared to 2023, compared to just 5 percent growth in North America (excluding Mexico) and 4 percent in Europe.
Looking at May alone, China’s sales were up 36 percent year-over-year. The numbers were not so hot for the other two key markets, which were down by 3 percent and 9 percent respectively.
The United States and Canada, says Rho Motion’s leading EV Data Analyst Charles Lester, are “suffering a blow to sales figures this year as Tesla (NASDAQ:TSLA) struggles to get back into the fast lane and President Biden announces tariffs for Chinese EV and battery imports.”
The world’s largest EV manufacturer is China’s BYD (OTC Pink:BYDDF,HKEX:1211), which launched an affordable EV model priced below US$10,000 earlier this year. The company plans to grow its annual sales by 20 percent to reach 3.6 million EVs in 2024, with a goal of selling about 500,000 units internationally. Rho Motion reports that BYD’s market share in Europe has reached 1 percent, up from about 0.5 percent in 2023, and the company sold 176,000 units overseas in the first five months of the year.
These cheaper Chinese EV models pose a problem for the other two major auto markets, North America and Europe, which are already grappling with trying to grow their own domestic EV industries to challenge China’s overwhelming dominance in the global EV market.
In May, the Biden administration effectively quadrupled tariffs on Chinese EVs to 100 percent, and disqualified imported EVs from the US$7,500 federal tax credit, in a move to protect the US auto industry.
Shortly after, the European Union (EU) imposed its own tariffs on Chinese EVs, which Reuters reports range from 17.4 percent for BYD to 38.1 percent for SAIC Motor Company (SHA:600104), another major Chinese EV maker. This is on top of the standard 10 percent car duty.
Lester warned against the tariffs on Chinese EV imports imposed by the EU. “If they hope to achieve their ambitious climate goals, they will want to maintain good trade relations with the fastest-growing EV market,” he said.
In late June, the Canadian government said it is also looking to protect its investments in the country’s burgeoning EV industry through new tariffs on China EV imports.
"A surge of low-cost EV imports from China will undermine everything being done right now to rebuild and grow a strong and truly national auto industry," Unifor President Lana Payne said.
In the US, the apparent stagnation in EV sales so far this year is largely a reflection of falling demand for Tesla vehicles. In its Q1 2024 earnings report, the company reported a 13 percent drop in revenue compared to last year, which was attributed to a more competitive EV market and more consumers choosing hybrid models over pure EVs. Tesla deliveries declined by 9 percent year-on-year, while total revenue dropped to US$21.3 billion from US$23.3 billion.
Tesla CEO Elon Musk told shareholders that more affordable Tesla models are in the works and could be brought to market in “early 2025, if not late this year.” However, in May his company laid off 10 percent of its global workforce.
Tesla sales lag as other US EV brands grow in 2024
The roadblock Tesla’s struggling to overcome hasn’t led other major US EV brands to hit the brakes, according to Bloomberg, which shared data from US auto industry authority Cox Automotive. The graph below shows that six of the 10 top brands saw EV sales growth in the US of over 50 percent year-over-year in the first quarter.
Q1 2024 year-over-year EV sales growth by brand in the US.
Chart via Bloomberg.
The companies in the US EV market that saw the biggest increases are Ford (NYSE:F) at 86 percent, Toyota (NYSE:TM,TSE:7203) at 85.9 percent, Mercedes-Benz (OTC Pink:MBGAF,ETR:MBG) at 66.9 percent, Rivian (NASDAQ:RIVN) at 58.8 percent, and Hyundai (KRX:005380) and Kia (KRX:000270), which were both up 56 percent.
Bloomberg reporter Tom Randall points out that removing the two worst performing brands for the quarter — Tesla, down 13.3 percent, and GM (NYSE:GM), down 20.5 percent — puts Q1 US EV sales growth at 23 percent year-over-year. GM’s sales drop had little to do with a drop in demand, but rather because it stopped the production of its Chevy Bolt, which was one of the best selling EV models in the US. Its new EV, the Chevy Equinox, is expected to release in 2024.
However, despite a stellar start to EV sales in 2024, both Ford and Toyota shifted into reverse on their once ambitious EV manufacturing targets. While Ford first made cuts to its expansion plans in late 2023, as recently as June 24, the auto giant said it is suspending the release of new battery electric vehicle (BEV) models because it doesn’t see the economic case for it in the current environment.
"We will not launch a second-gen [EV] product unless it's profitable within the first year and we are going to get a return on that capital we're investing," said Ford Chief Financial Officer John Lawler. This is telling, coming from the second best-selling EV brand in the US so far in 2024.
And then there’s Toyota, which is looking to delay the planned 2025 launch of EV production in the US to 2026. In April, Toyota Chairman Akio Toyoda expressed his company’s belief that a “multi-pathway approach” is the best route to decarbonizing transportation, and that “customers, not regulations or politics,” will dictate the path forward. In addition to BEVs, the Japanese car maker is also focused on hybrid and hydrogen-powered vehicles as well as continuing with its internal combustion engine (ICE) models.
What’s in store for the rest of 2024? A lot of optimism still remains for the EV market for the remainder of the year.
The International Energy Agency’s (IEA) Global EV Outlook 2024 released in late April is forecasting that EV sales will hit 17 million worldwide by the end of the year — representing one in five of new car purchases.
“Electric cars continue to make progress towards becoming a mass-market product in a larger number of countries,” the IEA stated. “Tight margins, volatile battery metal prices, high inflation, and the phase-out of purchase incentives in some countries have sparked concerns about the industry’s pace of growth, but global sales data remain strong.”
The long-term outlook for the EV market
Looking further out, the IEA expects that EVs will represent half of total global auto sales in 2035. That figure could increase to two-thirds if governments are able to meet all their energy and climate mandates on schedule.
Speeding up the adoption of EVs will also require automakers to bring more affordable models to market that are price competitive with their internal combustion engine equivalents. China is already doing well in this facet of the market; however, much ground needs to be covered in the North American and European markets, which are struggling with supply chain issues for EV battery metals as well as a lack of public charging infrastructure.
According to IEA estimates, more than 60 percent of electric vehicles sold in China last year were cheaper than their ICE counterparts. In Europe and the US, depending on the geographic location and the vehicle type, the agency reports that EVs are 10 percent to 50 percent more expensive than ICE vehicles. On the plus side, based on current trends, the IEA forecasts that price parity between EVs and ICE vehicles could be reached in ex-China markets by 2030.
For its part, BloombergNEF released its Long-Term Electric Vehicle Outlookin June. Using its base case scenario, the firm's analysts predict that by 2027, annual passenger EV sales will reach 30 million, representing 33 percent of total global vehicle sales, and forecast that EV sales will top 40 million in 2030. By 2040, they predict this figure will hit 73 million, making up 73 percent of total vehicle sales worldwide.
This base case scenario is based on consumer demand replacing policy-driven demand as battery prices decline, costs become competitive with ICE vehicles and battery technologies improve range and performance.
Chart via BloombergNEF
Investor takeaway
In 2024, the global EV market is sending clear signals that this is very much a growth stage market. The early adopters have bought in and now automakers must prove to the average consumer that their product is worth consumers' hard-earned dollars. Additionally, if governments want car buyers to come along for the ride on the road to net-zero, they’ll have to play a bigger role incentivizing both consumers and producers to go all-in on EVs.
Regardless, the long-term outlook for the EV market remains a positive one, which bodes well for battery metals demand. Check out our articles on the Biggest Electric Vehicle Stocks and How to Invest in Battery Metals for more insight into the investment opportunities in this sector of the growing green economy.
Don’t forget to follow us @INN_Technology for real-time news updates!
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Emergent Waste Solutions
Investor Insights
Emergent Waste Solutions presents a compelling opportunity for impact investing, leveraging a disruptive technology that promises to become a profitable solution to the world’s growing waste problem.
Overview
Emergent Waste Solutions (EWS) is a Canadian company that converts waste into marketable products using its proprietary Advanced Thermolysis System (ATS). The technology uses materials like municipal solid waste, tires, plastics, biomass and livestock waste as feedstock and converts these into valuable products, such as activated carbon, carbon black, biochar, bio-coal, syngas and bio-oil.
The company’s North American facility is in Ruby Creek, British Columbia, which has entered commercial production and achieved the first sales of its biochar. The plant, which has a CaPEx of $3.5 million has attractive economics with potential revenues at full operation of over $1.6 million and net profit before tax of $721,000 (to finance its first plant, EWS sold 54 percent interest in revenue from the plant to investors.). In addition, the company has a strong pipeline of projects in excess of $100 million in CapEx. This includes three projects in Canada and international projects in Brazil, Ghana and the Philippines.
These projects will process agriculture waste, wood waste, used tires and municipal solid waste, and depending on feedstock will produce biochar, bio-oil, bunker-grade diesel, renewable natural gas and carbon black.
EWS is pursuing several global revenue models: 100 percent ownership, the sale of its ATS plants; and joint ventures, where Emergent aims to hold a minimum of 50 percent ownership of a project. Such JV arrangements will allow EWS to maintain optimal plant operating parameters, ensure maintenance and plant upgrades, have a national and international sales strategy, and execute new product development to achieve maximum profits.
The company expects significant revenue growth over the next few years, forecasting an increase in revenue. On top of this, the margins in the business are predicted to remain high and increase as the scale of the business grows and as it focuses on sales of specialty grow blends versus commodity biochar.
According to EWS, the traditional waste treatment and disposal service industry in Canada alone was valued at $5.1 billion in 2022. Even if EWS was to capture a small percentage of this market, the potential revenue numbers are large. EWS believes the Canadian market will need more than 3,500 plants to treat different waste streams. For example, waste wood biomass would need more than 1,700 plants, municipal solid waste (MSW) will need over 750 plants, and livestock manure will need more than 600 plants.
The company’s ATS technology has lucrative economics. An ATS5000 plant (processing 120 Tonnes per day for 330 days per year) using MSW as feedstock has the potential to generate nearly $55 million in annual revenues with an operating income of about $42 million.
EWS offers investors an attractive ESG investment opportunity to benefit from the growing demand for renewable natural gas, biochar, bio-coal and carbon black.
Company Highlights
- Emergent Waste Solutions (EWS) is a private Canadian company focused on converting waste into valuable carbon-based commodities, including renewable natural gas (RNG), oils, and bunker grade diesel.
- The company boasts of a disruptive Advanced Thermolysis System (ATS) technology (patent pending) to process various feedstock such as municipal solid waste, tires, plastics, biomass and livestock waste, and convert them into useful products such as activated carbon, carbon black, biochar, bio-coal, syngas and bio-oil.
- The company’s project in Ruby Creek, BC is operational and has achieved commercial production with sales of biochar. Moreover, the company has a robust pipeline of projects both in Canada and internationally.
- The market opportunity for EWS’s technology is very large. Traditional waste treatment market in Canada is valued at $5.1 billion with an estimate of over 3,500 plants needed to treat various streams of waste in Canada.
- EWS offers investors an attractive ESG investment opportunity to benefit from the growing demand for renewable natural gas, biochar, bio-coal and carbon black. The company has entered into an amalgamation agreement with Buscando Resources pursuant to which Buscando will acquire all of the outstanding shares in the capital of EWS by way of a three-cornered amalgamation, subject to the terms and conditions of the Amalgamation Agreement.
Key Project
ATS Technology and Manufactured Products
EWS uses its patent-pending, proprietary Advanced Thermolysis System (ATS) technology, as a superior alternative to incineration and creates valuable products without creating pollution. It uses a process whereby carbon-based feedstock such as wood fiber is placed in an oxygen-deprived reactor. The heated feedstock cracks at the molecular level and separates into chemical components – carbon, oil and renewable natural gas. EWS’s technology uses a combination of steam, direct heat, indirect heat and medium pyrolysis, ensuring a complete penetration of the feedstock and a complete separation of the constituent elements.
Based on the different feedstocks, EWS’s technology can produce different products such as renewable natural gas, biocoal, biochar, carbon black, diesel and bio-oil. These products are explained below in brief.
1. Biochar: A solid material derived from carbon-based biomass. It is a pure form of charcoal and, due to its porous structure, has numerous uses and benefits.
2. Carbon Black: ATS technology recaptures and purifies the carbon black in waste rubber tires.
It is mainly used as a reinforcement agent in the manufacturing of rubber tires and also used as a pigment and as an additive in plastics, paints and ink pigment.
3. Bio-Oil: Bio-Oil is produced when biomass is processed using ATS technology. The product generated using ATS has less moisture and is a relatively purer product compared to other technologies.
4. Green Diesel: When tires or plastics are processed with the ATS, a dark-colored light diesel is produced. It can be blended with regular diesel and used for diesel generators and off-road machinery.
5. Biochar Grow Medium Blends: In conjunction with Coastal Raintree Consulting, EWS has developed a line of Grow Medium Blends with a biochar foundation, specifically a Cannabis Blend, a Germination Blend, and a Potting Blend.
6. Bio coal: It is a biomass fuel and a replacement for thermal coal (used to make electricity). It is also an alternative to coking coal for use in steel and other metallurgical industries. Moreover, thermal power plants can use bio coal without significant changes to the thermal coal plants. Bio coal burns cleaner and results in less GHG discharge.
Management Team
Kevin Hull – CEO and Director
Kevin Hull holds a degree in business administration, and has extensive experience in mining and environmental technologies and has sales and marketing expertise. He has consulted for companies and developed marketing strategies. Before founding EWS, he was active in capital markets and was instrumental in securing $20 million from a state-owned Chinese enterprise into a Canadian junior resource company on the TSXV.
Brian Gusko – Director and VP of Finance
Brian Gusko has more than 15 years of experience in capital markets and has helped raise over $50 million for various firms. He has served on the board of at least 10 public companies and has also served as the CEO and CFO for several public companies. He was instrumental in taking Biome Grow public, which upon listing was valued at over $200 million.
Dan Becher – Director
Dan Becher holds a diploma in instrumentation and control systems from British Columbia Institute of Technology. He has more than 37 years of rich experience having worked in industrial chemical plants in varied roles of engineering design and maintenance of both process control and electrical systems. His experience is valuable in the areas of plant operations, maintenance and design enhancements.
Serge Borys – Director
Serge Borys holds a bachelor’s degree in commerce from the University of British Columbia and a law degree from the University of Alberta. Since 2005, he has been a principal in 77 Group Corp., a US corporation having substantial real estate holdings in China. He has a comprehensive understanding of technology and the patent process.
Alicia Passmore – VP Manufacturing
Alicia Passmore has extensive training and experience in setting up and working with manufacturing processes, specifically with implementing LEAN manufacturing techniques. She has rich experience in the vitamin and supplement industry, which includes the formulation of new products.
Benjamin Ryder – Chief Operations Officer
Benjamin Ryder has more than 23 years of experience in administration and project management. He received project management training at the Southern Alberta Institute of Technology. He has previously worked with Bridgewater Bank where he was a key figure in the development of the credit card division. He has experience in developing large web applications and show homes for major property developments.
Rhonda Hyslop – Engineer
Rhonda Hyslop has received training as a chemical engineer and has primarily worked in industrial wastewater treatment plants, where her responsibilities have included facility design to commercial scale-up. She owns two patents and has worked on lab-scale to pilot-scale commercialization projects.
Jason Rossett
Jason Rosset is the founder of Accuworx Inc. and Sure Horizon Environmental Inc. (two leading North American environmental service companies, which are now part of NYSE listed GFL Environmental Inc.), and current chairman of Sluyter Company Ltd., a chemical manufacturer.
He is also former chair of Young Presidents’ Organization (YPO) Upper Canada and Maple Leaf Chapters. YPO is a global organization of 22,000 current and former CEOs; their companies represent approximately 10 percent of global GDP.
Dr. David Galvez – Advisor
Dr. David Galvez received his doctorate in plant physiology from the University of Alberta, and is a seasoned expert in the formulation and commercialization of botanical-based products using traditional, non-traditional, and functional ethnobotanical plant extracts. He has developed and launched commercial products in the dietary supplement market for pain relief, sleeplessness, relaxation, and anxiety management, both in capsule and drink formats. Currently, he is focused on the nano-emulsification of cannabinoids and terpenes, the development of novel beverages, and securing research partnerships with academic institutions.
Dr. Anayansi C. Cohen-Fernandez – Advisor
Dr. Anayansi Cohen-Fernandez is a biologist and senior reclamation specialist. She is the director of Coastal Raintree Consulting and a sessional instructor at the SFU/BCIT MSc. in ecological restoration. She specializes in land reclamation and restoration planning including reclamation following mining, oil, gas, energy, urban, forestry and agricultural disturbances. She has more than 10 years of environmental consulting and resource management experience.
Dr. Amir M. Dehkhoda – Advisor
Dr. Amir Dehkhoda has a PhD in chemical engineering and has extensive research and development experience in applied electrochemistry, material development, wastewater treatment and catalysis. He is currently an industrial postdoctoral fellow with a Richmond, BC-based biotech company that focuses on the characterization and optimization of wood-based nanomaterial for electrochemical energy storage and wastewater treatment applications. He has significant experience in the development of value-added carbon material from biomass waste.