According to an analysis from Ark Investments, internal combustion engines (or ICEs) are nearing obsolescence, even though media reports often portray electric vehicles as the declining technology.
The market share statistics for 2024 highlighted a significant change as consumers moved towards alternatives, showing that the market share of internal combustion engine (ICE) vehicles has decreased by around 5 percentage points each year since 2019.
“This trend is anticipated to speed up further as battery electric vehicles and plug-in hybrids keep growing in popularity,” stated Akaash TK, a research associate focusing on Autonomous Technology and Robotics at Ark Investments.
Although plug-in hybrid electric vehicles have seen substantial relative growth lately, battery electric vehicles have demonstrated quicker overall growth over the past ten years, he mentioned.
Traditional automakers are leveraging plug-in hybrid EVs (or PHEVs) as a transitional strategy while they struggle to produce competitive, affordable fully electric vehicles, according to Ark Investments.
“Innovative competitors capitalizing on declining battery costs are positioned to introduce much less expensive BEVs (battery electric vehicles),” TK said, and added that the potential emergence of commoditized robotaxi fleets could further accelerate ICE vehicle decline.
China offers a revealing preview of this global transition, with BEVs and PHEVs capturing approximately 25% and 19% market share respectively last year.
The analysis revealed this caused China’s ICE share to drop to 52%, notably lower than the 80% market share for ICE observed internationally.
Tesla’s (
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Ark Investments has stated that announcing a budget-friendly electric vehicle model could significantly increase worldwide EV demand outside of China.
“Despite recent tariff developments introducing uncertainty, BEVs are positioned to become the most performant and lowest-priced transportation solution globally,” TK concluded.
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