[2023 Electric Vehicle Outlook] Electric Vehicles to Sell Twice as Much as This Year... Battery Investment Accelerates

Surging Demand Due to Expanded EV Support in the US and China

[Asia Economy Reporters Oh Hyung-gil, Choi Dae-yeol] As the movement to phase out internal combustion engine vehicles gains momentum worldwide, the electric vehicle and battery industries are poised for another leap forward next year.

Although production faced challenges this year due to supply chain crises and shortages of automotive semiconductors, next year is expected to see explosive demand as countries like the United States and China deploy support measures to accelerate the electrification trend. Automakers plan to launch a variety of new models, and battery companies intend to respond with aggressive investments.

It is forecasted that the penetration rate of electric vehicles in the global automotive market will reach 16% next year. This penetration rate, which refers to the proportion of electric vehicles among all vehicles sold to consumers, will double in two years compared to last year’s 8.4%. While concerns about economic recession suggest that the overall automotive market recovery will be slow next year, the adoption of electric vehicles is expected to accelerate significantly.

According to the 2023 business environment outlook recently shared internally by Hyundai Motor Group’s Management Research Institute, the expected global vehicle sales volume next year is 80.72 million units. During the same period, electric vehicle sales (including plug-in hybrids) are projected to reach 12.8 million units, making the share of electric vehicles among all new cars sold approximately 15.9%, the company anticipates.

With the expansion of charging infrastructure and a favorable environment for electric vehicle adoption, as well as traditional internal combustion engine-focused companies like Volkswagen, Ford, and Toyota consecutively releasing new electric vehicle models, the market size is expected to grow. According to the institute’s data, among new battery electric vehicle (BEV) models this year, 59% are from existing automakers. This figure is expected to rise to 66% next year and 71% the year after.

The battery industry is also expected to continue aggressive investments next year. Production facilities in Europe and the United States will be operated, and the pace of new factory construction will be accelerated. To keep up with the steep increase in electric vehicle demand, battery supply is anticipated to grow sharply.

This content was produced with the assistance of AI translation services.