The government of the Federation of Bosnia and Herzegovina has earmarked about half a million euros to promote the purchase of electric and hybrid vehicles this year. Unlike last year, businesses can now also benefit from the scheme.
The total subsidies of one million marka will be divided equally between private individuals and companies, with 500,000 marka each. BEV drivers can apply for 10,000 marka – or 5,100 euros. For the purchase of a PHEV, the government will contribute 7,000 marka and 5,000 marka for a full hybrid.
Citizens and businesses can apply for the grants until 11 December 2023 or until the budget is exhausted. Since the distribution among the three drive types is flexible, it is hard to say how many cars will be subsidised. If only full hybrids were considered, the cash would suffice for up to 200 vehicles. If only BEV were eligible, the funding pot would be empty after only 100 cars.
In 2022, the Federation of Bosnia and Herzegovina also allocated 1 million BAM in grants for the purchase of new electric and hybrid vehicles. However, last year the funding was reserved exclusively for private individuals.
Global EV sales continued as expected by us at the beginning of 2023. A total of 14,2 million new Battery Electric Vehicles (BEV) and Plug-in Hybrids (PHEV) were delivered during 2023, an increase of +35 %. 10 million were pure electric BEVs and 4,2 million were Plug-in Hybrids (PHEV) and Range Extender EVs (EREV).
In most countries the EV increases were accompanied by a strong recovery in overall light vehicle markets, increasing by +10,5 % globally. EV adoption does not follow auto market slumps and recoveries in lockstep. Successful EV launches, financial incentives, improving charging infrastructure and environmentalism are stronger forces. Slowing overall auto sales typically lead to faster EV share increases while strong auto market recoveries slow down EV share gains.
BYD increased sales to 3 million units (+62 % y/y), remaining as the #1 in the global EV sales ranking, with their 1,44 million PHEV sales included. Counting BEVs only, Tesla still leads with 1,81 million units delivered in 2023, an increase of 38 % over 2022. A common observation is that pure EV players grew their sales faster than legacy OEMs.
Finally, 2023 saw a worldwide, robust recovery of auto sales. Following the Covid crunch of 2020 and supply constraints during 2021 and 2022, better availability, lower prices and pent-up demand pushed global light vehicle sales to a 10,5 % increase over 2022.
Globally, EVs outperformed the market by a good margin, increasing volume by 35 %. Exceptions were in Germany, Norway, Italy and South Korea, where EVs lost market share compared to 2022. The German drawback was particularly painful with a 6 % loss in EV market share and 122 000 fewer units delivered. A series of EV incentive cuts were the main reason, legacy OEMs acting more margin-conscious was another.
EV deliveries in USA grew by 48 % over 2022 (46 % for USA & Canada combined), having increased 50 % from 2021 to 2022. It appears that the EV grants in the Inflation Reduction Act (IRA), available since January 2023, had limited impact on EV adoption. The grants require EV production within the USMCA (fmr NAFTA) and battery material sourcing from Free Trade Agreement partners (China is not). Battery supply constraints were a frequent occurrence among domestic OEM during 2023.
China is, by far, the largest EV market with 8,4 million units in 2023 and 59 % of global EV sales. With 9,3 million EVs made, China’s role as the largest EV production base is even stronger: 65 % of global EV sales in 2023 came out of China. 900 000 EVs were exported from China, most of them (530k) by Western brands. The largest exporters were Tesla, SAIC (MG, Maxus), Geely (Volvo, Polestar, Lynk, Smart) BYD, Renault (Dacia), BMW and Great Wall. All others exported below 20 000 units each.
BYD extended it’s lead, by boosting sales of existing models and successfully introducing new models. The BYD vehicle portfolio covers 10 product segments with a total of 30 vehicle models. Since BYD phased out ICE-only versions in 2022, they became the largest maker of PHEVs and moved from rank #3 in 2021 to #1 for BEVs & PHEVs combined. Among over 3 million unit sales in 2023, only 130k were exported; seven times more than in 2022.
Tesla still leads global sales of BEVs but by a smaller margin, with a share of 18 % in all BEVs sold worldwide. Year-on-year volume growth for Tesla was +38 %, compared to a 30 % increase of total BEV sales.
The VW Group increased EV sales by +20 % over 2022; BEVs gained 31 %, while PHEVs lost volume. Growth in China was only 5 % y/y to 232 000 units, with a decline only avoided by a strong boost of Audi Q4 BEV and VW ID.e BEV sales in the second half of the year. Sales in USA & Canada increased by +61 % from a surge in Audi Q4 BEV sales and the ramp-up of US production of the VW ID.4 BEV. Sales in Western & Central Europe increased by +21 % y/y to 636 000 units, representing 63 % of the Group’s BEV & PHEV volume.
Geely, including their international brands Volvo, Polestar, Lynk & Co, Lotus and Smart increased sales by +44 %. The highest contributors were the new Geely Panda Mini, the Lynk & Co 08 PHEV, the new Smart #1, various models from Volvo, Zeekr and their new Galaxy Brand. The Emgrand, Geometry and Maple are in strong decline and may be phased out. Polestar disappointed by just 11 % growth, still offering only one volume model, the Polestar 2.
The world’s best selling automobile is a BEV. Tesla delivered over 1,2 million units Model Y, more than any other vehicle model, including ICEs. Meanwhile, the Model-3, in its sixth year of production, increased by 11 % to 529 000 units. The face-lifted version started in China in Q4 and represents less then 10 % in this volume.
BYD had five models in the global top-10, with the Song and Qin as the world’s best selling PHEVs; a legacy from their regular ICE business which BYD abandoned in April 2022. The Song PHEV is a mid-size SUV of 470cm length / 168cm height, starting at 160 000 RMB in 2023, 100 000 RMB below a Tesla Model Y. There is a Song BEV variant with 72 kWh, alternatively 87 kWh battery capacity for 190 000 RMB, which sold 93 200 units in 2023. The newcomers Dolphin, Yuan Plus and Seagull, all BEVs had a flying start, shifting BYD growth towards more BEVs. BYD exported 15 000 units Yuan, Dolphin and Seagull in December alone.
GM-Wuling’s Mini EV sales are in decline since the launch of the larger Wuling Bingo (168k sales) and the brand revival of the Geely Panda Mini (110k sales).
The Aion brand is the New Energy Vehicle division of Guangzhou Automobile a state owned enterprise. The Aion Y is a compact SUV, the Aion S is a mid-size Sedan. Both offer relatively large batteries (long range) at very competitive prices.
Sales of EVs in 2023 were supported by a broad vehicle market recovery amounting to +10,5 % over 2022. For 2024, we expect global Light Vehicle sales growth to be lower and less consistent, including a likely decline of overall vehicle sales in China.
Upgraded EVs, maintained financial incentives, improving charging infrastructure and environmentalism continue to support EV growth. OEMs are reducing prices where margins allow, as a further catalyst for higher sales. We expect 17,8 million global EV sales in 2024 with a market share of 19,6 % in global light vehicle sales. EV sales grow by +25 % in a global light vehicle market increasing by +1 %.
For China we expect an NEV share of 41 % with volume growth of 17 % y/y to 9,8 million units BEVs & PHEVs, which is below e.g. CPCA expectations as they still expect an increase of overall vehicle sales. Provinces may stimulate vehicle sales to support their local OEMs. This includes ICE vehicles, slowing EV share growth.
For USA and Canada combined we expect BEV & PHEV sales to grow by +56 %, for a share of 13,8 % in total light vehicle sales. The Inflation Reduction Act (IRA) stimulates EV growth in USA, once the complex conditions for obtaining grants are better understood. BEVs and PHEVs assembled in USA, Canada and Mexico stood for ca 77 % total PEV sales in the US last year; we expect this share to increase in 2024.
The number of EVs in operation world-wide reached 40 million at the end of 2023, counting light vehicles. With approximately 1,5 billion light vehicles in operation, this is still just 2,7 % of the global fleet and 1,9 % counting BEVs only.
The number of light vehicle on the road worldwide increases by around 40 million units on average every year, as many as the entire current vehicle population of the UK. Last year, 10 million of this increase (25 %) were BEVs and 30 million additional vehicles (75 %) are still burning petrol or Diesel.
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