Cost-effective electric vehicles (EVs) play a crucial role in promoting global adoption, as highlighted by the International Energy Agency (IEA). This importance is especially evident in both emerging and developed markets.
Barriers to widespread adoption
Although EVs typically provide lower lifetime ownership costs due to diminished fuel and maintenance expenses, their high initial prices continue to pose a significant obstacle. The IEA’s Global EV Outlook indicated that in 2023, as much as 95 percent of EV sales in key emerging markets consisted of large, premium models that are out of reach for the average consumer.
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Rising popularity of compact models
Recently introduced smaller, budget-friendly EV models have seen a surge in popularity, particularly in China, where compact vehicles are the market leaders. According to a report by China Economic Net, in 2024, almost 95 percent of small car sales in China were electric, fueled by advanced features that were once exclusive to luxury models.
Growth of plug-in hybrid electric vehicles
Additionally, plug-in hybrid electric vehicles (PHEVs) are experiencing a global rise, addressing concerns related to mileage and charging infrastructure. In the first quarter of 2024, Chinese manufacturers represented over 70 percent of global PHEV sales, with notable export increases to regions such as Asia, South America, and North America.
Need for international collaboration
Experts emphasize the necessity of international technological collaboration to tackle the challenges of EV affordability. Luigi Gambardella, President of ChinaEU, proposed harnessing AI and data management to enhance mobility solutions, merging European manufacturing strengths with China’s AI advancements.
