The EV slowdown has been a topic of discussion since the beginning of the year. Even Tesla, a leading EV manufacturer, has acknowledged a significant sales decline in 2024, with its growth significantly slowing down. In fact, Tesla was overtaken by its Chinese rival, BYD, during the last quarter of 2023. However, the slowdown doesn’t represent the complete picture of the global EV market.
China’s EV market has experienced remarkable growth in the first half of 2024. In July, global EV sales surged by 21% thanks to a record increase in Chinese sales, according to a report by Rho Motion, a research firm. China sold 1.35 million EVs globally in July, marking the largest jump of 2024, with sales rising by 31% year-over-year to 0.88 million EVs. Notably, half of all cars sold in China during July were either EVs or plug-in hybrids, highlighting a significant shift towards electric vehicles. This is particularly impressive considering that EVs still make up a small fraction of sales for traditional automakers like General Motors, Ford Motor, and others.
While North America reported moderate growth of 7.1% in EV sales, Europe experienced a contraction of 7.8% in July. This stark contrast underscores the varying pace of EV adoption across different regions. China’s dominance in the EV market is further evident in the success of BYD, often referred to as the ‘Tesla killer.’ BYD reported a 13% increase in global BEV sales and a 44% rise in PHEV sales in the first seven months of the year.
Meanwhile, US and European automakers are facing challenges in their EV transitions. Traditional players like General Motors and Ford Motor have been focusing on controlling the high costs associated with EVs and scaling down their electric ambitions. Ford, in particular, continues to grapple with substantial EV losses, with the segment reporting a 37% revenue drop during the second quarter. The losses were so significant that they nearly offset the $1.2 billion profit made from internal combustion engines, highlighting the difficulties Ford faces in adapting to the changing market.
The core challenge for Ford and other legacy automakers lies in the fundamental differences between their long-established business models and the emerging EV landscape. Despite these challenges, both Ford and GM remain optimistic about successfully navigating the EV transition. They see pickup trucks as a key driver in their electric vehicle strategies, offering a path to profitability in the evolving market.
Adding another layer of intrigue to the global EV narrative is the emergence of US-based Worksport Ltd., a company specializing in innovative hybrid and clean energy solutions for light trucks. Worksport is poised to disrupt the market with its latest innovations, and its recent financial performance speaks volumes about its potential.
Worksport reported an impressive 860% revenue increase in the second quarter, with sales exceeding its entire 2023 year-end revenue of $1.5 million. This remarkable growth trajectory is driven by the company’s expanding channels and the introduction of innovative, higher-margin products like the solar-powered duo, SOLIS and COR. The Alpha release of the SOLIS tonneau cover and COR portable system is scheduled for launch in September, followed by their market launch. The company’s revenue surged 275% from the first quarter to a record $1.92 million in the second quarter. This surge is attributed to the new Buffalo factory and the implementation of dealer and e-commerce marketing initiatives, indicating the early stages of Worksport’s growth journey.
Gross profit margins for Worksport also saw significant improvement, increasing by 111% from the first quarter to 15.4%. As Worksport continues to optimize its operations, these initiatives are expected to further enhance future margins. The company is on track to meet or exceed its revenue guidance of $6 to $8 million by year-end, a figure that excludes potential revenues from the AL4 and off-grid power products, SOLIS and COR.
Looking ahead to fiscal year 2025, Worksport anticipates its tonneau cover business alone, excluding the clean-tech business, to generate revenue between $15 and $20 million.
In conclusion, while the EV slowdown is evident in Europe and the US, the global picture is far more nuanced. China’s booming EV market and the emergence of innovative companies like Worksport highlight the dynamic nature of this rapidly evolving industry. The future of EVs is not solely defined by the challenges faced in certain regions but by the exciting developments and opportunities emerging across the globe.
