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Despite Climate Concerns SUV Sales Surge While EVs Stall
Despite growing concerns over climate change and the push for energy-efficient transportation, SUV sales continue to surge worldwide. According to GlobalData, 54% of all cars sold in 2024 were SUVs, marking a steady increase over the past few years. This trend raises critical questions about consumer behaviour, industry incentives, and the environmental consequences of larger, less fuel-efficient vehicles.
The Unexpected Popularity of SUVs
Many experts have predicted a global shift toward smaller, energy-efficient electric vehicles (EVs) due to rising fuel costs and environmental concerns. However, SUVs now dominate the market, outpacing standard-sized EVs in major regions such as Europe, China, and the U.S.. In fact, SUV sales have grown even as overall car sales remain stable, suggesting a deliberate shift in consumer preference.
According to a BBC report, the momentum was thought to be with smaller, energy-efficient electric vehicles. However, the sales of standard-sized electric vehicles (EVs) have actually decreased in major markets such as Japan and Germany, and their sales growth has slowed in India.
SUV Sales – India, China and U.S. ( BBC Report)
What’s Driving SUV Sales?
Several factors contribute to the continued popularity of SUVs:
Consumer Preferences: Buyers are drawn to SUVs due to their spacious interiors, high seating position, and perceived safety. Many consumers feel more secure in a larger vehicle, even if it comes at the cost of higher fuel consumption.
Marketing Strategies: The automobile industry has aggressively marketed SUVs as the ideal family and adventure vehicle. Manufacturers have positioned SUVs as both luxurious and practical, making them an attractive choice for a broad range of consumers. Dudley Curtis from the European Transport Safety Council says, “It is the industry that has driven the demand through huge marketing and advertising campaigns in recent years. SUVs offered the industry a simple way of charging more for a vehicle that does the same thing as others.”
Higher Profit Margins for Manufacturers: Automakers favour SUVs because they yield higher profit margins. Despite being costlier to produce, SUVs allow manufacturers to charge significantly more per unit, making them a more lucrative investment compared to smaller, fuel-efficient vehicles.
Growing Affluence in Emerging Markets: In countries like China, India, and Brazil, rising incomes have fueled SUV sales. GlobalData reported that in 2024, China saw 11.6 million SUV sales, making it the world’s largest market, followed by the U.S., India, and Germany.
The Environmental Cost of SUVs
The rapid growth of SUVs presents significant environmental challenges. According to the International Energy Agency (IEA), SUVs accounted for more than a quarter of the global oil demand increase between 2022 and 2023. Additionally, if SUVs were classified as a nation, their collective carbon emissions would rank fifth globally, surpassing entire countries like Japan.
Some key environmental concerns include:
Higher Fuel Consumption: SUVs consume 20% more fuel than medium-sized cars, largely due to their heavier weight. This increases both carbon emissions and oil dependency.
Increased Resource Extraction: Even electric SUVs require larger batteries, increasing the demand for critical minerals like lithium and cobalt. This contributes to environmental degradation in mining regions.
Urban Congestion and Safety Concerns: Cities are struggling to accommodate larger vehicles on roads and in parking spaces. Additionally, pedestrian safety advocates argue that SUVs pose a higher risk of accidents.
Due to the robust growth in SUV sales, the IEA says oil consumption of these vehicles has increased by 600,000 barrels per day globally between 2022 and 2023, accounting for more than a quarter of the total annual rise in global oil demand.
Are Electric SUVs the Solution?
Automakers argue that electric SUVs are helping offset emissions, with GlobalData reporting that over 20% of SUVs sold in 2023 were fully electric, up from just 2% in 2018. However, critics point out that even electric SUVs require more energy and materials to produce than smaller EVs. Additionally, plug-in hybrid SUVs—marketed as an environmentally friendly alternative—are often driven in fuel mode, reducing their emissions benefits.
A Setback for Green Transportation?
The continued dominance of SUVs highlights a disconnect between climate goals and consumer behaviour. While electric SUVs offer some hope for lower emissions, the overall trend toward larger, heavier vehicles undermines the progress of green transportation. The battle between environmental responsibility and consumer preference will continue as governments push for more stringent emissions regulations.
