The Global Electric Vehicle Market Faces Challenges: Morgan Stanley Predicts Slowdown in Adoption
In a recent note to clients, Morgan Stanley analysts have highlighted a possible slowdown in the global adoption of electric vehicles (EVs) over the next 12-18 months. Economic uncertainties and geopolitical challenges are cited as key factors contributing to this trend.
The bank emphasizes the importance of global alliances, especially those involving Chinese EV technology and local market access, to overcome these obstacles and reignite EV momentum. Despite years of strong growth, the global EV market is now facing challenges such as global geopolitical tensions, China's economic fragility, and AI tech-driven disruption.
Morgan Stanley has revised its forecasts for global battery electric vehicle (BEV) penetration, with a reduction to 17% by 2026 from the previous estimate of 20%. In China, a key market for EV adoption, the BEV penetration forecast for 2026 has been lowered to 31% due to potential delays in reaching global EV-ICE price parity.
However, the analysts predict that EV growth will pick up pace again in 2027, with BEV penetration reaching 32% by 2030. To address these challenges, Morgan Stanley recommends strategic tie-ups between global and Chinese automakers, which could accelerate the development of global EVs and reduce costs significantly.
The firm sees a $150 billion investment opportunity in localizing Chinese EV production in global markets by 2030. Despite current concerns about slowing EV sales, Morgan Stanley believes that cross-border collaborations could enhance the market share and profitability of early movers in the EV industry.
In conclusion, while the global EV market may face challenges in the short term, long-term growth opportunities remain promising. Strategic partnerships and investments in EV technology could pave the way for a more sustainable and profitable future in the electric vehicle industry.