Breaking News: Morgan Stanley Predicts Slowdown in Global EV Adoption Due to Economic Uncertainties and Geopolitical Challenges
Morgan Stanley analysts are warning of a potential slowdown in the global adoption of electric vehicles (EVs) over the next 12-18 months. In a recent note to clients, the bank emphasizes the importance of global alliances, especially those involving Chinese EV technology and local market access, in overcoming these obstacles and reigniting EV momentum.
The global EV market, which has seen rapid growth in recent years, is now facing challenges such as global geopolitical tensions, China's economic fragility, and AI tech-driven disruption. As a result, Morgan Stanley has revised its forecasts for global battery electric vehicle (BEV) penetration, with estimates for 2026 now reduced to 17% from the previous 20%.
In China, where EV adoption has been strong, Morgan Stanley has also lowered its BEV penetration forecast for 2026 to 31%, citing potential delays in reaching global EV-ICE price parity due to trade barriers and localization requirements. However, the analysts predict that EV growth will pick up again in 2027, with BEV penetration reaching 32% by 2030.
To address these challenges, Morgan Stanley is advocating for strategic tie-ups between global and Chinese automakers. They believe that such partnerships could significantly reduce development time for global EVs and cut costs by up to 40% over the next decade. The firm sees a $150 billion investment opportunity in localizing Chinese EV production in global markets by 2030.
While there are concerns about slowing EV sales in the current market sentiment, Morgan Stanley remains optimistic about the future of the industry. They believe that cross-border collaborations could greatly enhance the market share and profitability of early movers in the EV space.
In conclusion, investors should keep a close eye on the developments in the EV market and consider the potential impact of these trends on their portfolios. Strategic investments in companies involved in global EV alliances could present significant opportunities for growth and profitability in the coming years.
