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In recent years, electric vehicles have represented one trend that has kept on giving. In 2023, the EV market is expected to generate a staggering $561.3 billion in revenue, with a compound annual growth rate of about 10% projected through 2028, leading to $906.7 billion in sales that year.

With such a sizable growth rate, it's easy to see why the EV market will continue to be one of the most exciting areas of technology in the coming years. Here are five trends we expect to see in the EV market in 2024.

EV sales will continue to grow

First, it's important to note that EV sales are expected to continue growing in 2024. In fact, EV sales have grown throughout 2023 — even though numerous headlines claimed that they have been falling in recent months.

The reality is that EV sales remain strong and growing, although the supply of unsold EVs on dealer lots has increased. In fact, the third quarter saw the strongest year-over-year growth in sales of battery-electric vehicles and plug-in hybrids since the fourth quarter of 2021. Additionally, EV sales surpassed 1 million for the first time in September.

It seems likely that the pessimism which has surrounded EV sales in recent months may be due to increasing inventories of unsold electric vehicles. In fact, BloombergNEF recently trimmed its estimate for EV sales in 2024 from 17.5 million vehicles, originally set in June, to 16.7 million. However, even that reduced number would mark a 20% increase from this year's forecast.

Additionally, Cox Automotive recently forecast that all-electric vehicles would account for over 10% of total vehicle sales in 2024. Including hybrids, the firm expects EVs to account for almost 24% of vehicle sales next year.

Prices will keep declining, making EVs more affordable for more people

A key piece of the puzzle in boosting EV sales is price, as a lack of affordability appears to be keeping many people out of the market. However, the good news is that technology will continue to improve, enabling lower prices on a larger number of EV models.

For example, increasing use of technologies like Ideal Power's bidirectional bipolar junction transistor, better known as B-TRAN, will reduce the bill of materials that go into building EVs. The B-TRAN is a bidirectional, low-loss power semiconductor, which means a single B-TRAN can improve vehicle range and potentially replace two or more conventional switches inside an EV, reducing the cost of components inside the vehicle and thus lowering its price tag so that more consumers can afford an EV. (Disclaimer: The author is the CEO of Ideal Power.)

Battery prices are also expected to come down as automakers continue to improve their battery technologies and chemistries, enabling higher ranges on their batteries alongside lower prices. Since the battery is estimated to account for about 40% of the price of an EV, slashing battery costs should dramatically lower EV prices, further supporting sales growth.

Solid-state EV-battery technology will continue to advance

Speaking of EV batteries, one particular area of technology has begun to capture more attention, and we expect this trend to continue in 2024. Toyota revealed a solid-state EV battery with a 745-mile range earlier this year and signed a deal to mass-produce solid-state batteries with a 932-mile range in October.

However, Toyota probably won't be the only successful player in solid-state EV batteries. A key benefit of these batteries is that they can pack more energy-producing capability into the same space as current EV batteries.

As a result, such technologies could play a major role in dramatically boosting range and eliminating range anxiety, which may still be keeping some consumers from going electric. In 2024, we could see some very interesting advances in solid-state EV batteries.

Tesla's charging plug to become the industry standard in the U.S.

Next year will also bring some critical changes in EV charging. Specifically, we would expect to see more automakers adopt Tesla's charging plug for their vehicles, a trend that began in 2023.

This past year, Ford, General Motors, Honda and others announced plans to adopt the charging ports that Tesla uses for its vehicles, and it's easy to see why. Tesla has been building out its Supercharger network rapidly, and it began making adapters available at its stations to allow drivers of other EVs to use those chargers.

However, by adopting Tesla's charging plug, other automakers will dramatically increase the number of stations at which drivers can charge their vehicles, further combating range anxiety.

Exploration of battery swapping will continue

Finally, we expect automakers to continue exploring the possibility of battery swapping alongside charging stations. There continues to be some debate about the viability of battery swapping as a method of recharging an EV, but there appears to be enough interest in it to spur continued investment.

For example, automaker Stellantis recently struck a deal with Ample, which has developed modular battery-swapping technology capable of delivering a 100% charge to any EV in a matter of minutes. It's too early to predict how popular battery swapping will be compared to simply plugging an EV in and charging it while on the go, but this isn't something that will disappear anytime soon.

Why these 2024 EV trends are critical

Perhaps the easiest way to sum up all these EV trends for 2024 is simply the idea of more: more models available, more affordability, more range, more and better technologies, more charging options, etc.

After all, it's clear that the future of transportation is electric, as the need to slash our carbon emissions has become even more apparent in recent years. Understanding these trends will go a long way toward predicting the biggest winners of the EV space.

While there will be many winners, not every company can be the best. Some technologies will end up working out better than others, so understanding and monitoring these trends is crucial in helping pick potential winners on the stock market.

Picking EV stocks

It may seem tempting to grab at every single EV stock, but diversification is critical when building a portfolio. In fact, there are so many EV stocks at this point that it has now become possible and even critical to diversify within the EV space, picking from among the many automakers, EV charging networks, and developers of different areas of EV technology.

After all, the EV space has simply gotten too big for any investor to ignore, and there will surely be many winners to choose from in the coming years.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Dan Brdar is the President, CEO and a Director of Ideal Power. He has over 30 years of experience in the power systems and energy industries and has held a variety of leadership positions during his career. In addition to his role at Ideal Power, Dan previously served as President and CEO of FuelCell Energy Inc., a Nasdaq-listed company with a market cap of over $250 million.

Read Dan's Bio