Is the Electric Vehicle Market Really Declining?

A Slowdown, Consumer Fatigue, or Just a Natural Adjustment?

Recent reports suggest that electric vehicle (EV) sales are losing momentum. Once hailed as the “end of internal combustion engines,” the EV market seems to be slowing down in 2025. Some interpret this as a sign of decline — but in reality, it’s more accurate to view it as a transitional phase influenced by multiple complex factors.

Still Growing — But at a Controlled Speed

According to the International Energy Agency (IEA), global EV sales are expected to exceed 20 million units this year, marking an increase of over 25% compared to last year. In other words, the market is still expanding.

However, regional trends tell a different story.
In key markets like the U.S. and Europe, quarterly sales have either decreased or seen weaker growth. Tesla, for instance, has recorded five consecutive months of sales decline in Europe.
In China, while local brands such as BYD are rapidly growing, Tesla’s sales dropped by more than 18% between January and May.

A Mix of Factors — Price, Charging, Brand Fatigue, and Repair Restrictions

There isn’t a single reason behind the slowdown — it’s a convergence of several issues.

First, price remains a major barrier. Government subsidies in many countries have been reduced or eliminated, and the average EV price is still higher than that of internal combustion vehicles. The high upfront cost continues to discourage potential buyers.
New Zealand is no exception — government EV rebates were significantly reduced at the end of 2023, and by 2024, certain EVs even became subject to Road User Charges (RUC).
In other words, EV owners are no longer receiving tax exemptions — they’re now paying additional fees.

Second, there’s growing distrust in charging infrastructure. Frequent charger malfunctions, insufficient public stations, and unreliable payment systems create frustration for drivers — particularly for those living in apartments or areas with limited parking.

Third, brand fatigue is real. Companies like Tesla have barely refreshed their model lineups in years, and their CEOs’ controversial remarks or corporate behavior have hurt public trust.

Then there are unique structural issues in the New Zealand market.
Brands such as Tesla and BYD restrict repairs and servicing to a small number of approved workshops, effectively blocking independent, high-quality repairers from access.
This limits consumer choice, causes long repair wait times, and creates regional service imbalances.

What’s worse, many of these vehicles don’t actually require “high-complexity” repairs — yet manufacturers still prohibit access or restrict parts supply.
As a result, EV owners face unexpected “repair inconveniences” after purchase, fueling psychological resistance toward buying EVs in the first place.

The Rise of Hybrids

Amid growing concerns over EV practicality, hybrid vehicles are making a comeback.
They don’t rely on external charging, offer excellent fuel efficiency, and are increasingly seen as a realistic alternative.
In the U.S., hybrid market share has risen by 3.8% year-on-year.
This trend suggests that full EV adoption may need a period of adjustment and recalibration.

A Decline or Just a Transition?

Ultimately, the current EV slowdown is not a collapse, but a market correction phase.
The early excitement has passed — and now, consumers are prioritizing convenience, service accessibility, and affordability.

For manufacturers, this is the moment to rebuild trust:

• Improve brand transparency,
• Rebalance pricing, and
• Break monopolies in repair infrastructure.

The EV market will continue to grow, but that growth must now evolve from rapid expansion to a mature, sustainable ecosystem that reflects real-world needs.