The year 2023 was an eventful one for the global auto industry. The major automakers in the United Statesendured a months long strike by the United Auto Workers (UAW) Union. This strike cost them billions of dollars in lost production and saddled them with expensive new collective agreements. At the same time, autonomous vehicles divided consumers. Furthermore used vehicle prices remained unusually high, and several automotive manufacturers were hit with large and expensive recalls. All the while, governments around the world continue to push incentives to encourage the adoption of electric vehicles. These same governments struggled to build out the infrastructure to support them. What will 2024 bring? What automotive industry trends will we see in the New Year? Here are automotive industry insights to expect in 2024.

Electric Vehicle Sales Accelerate

There was a lot of talk throughout 2023 of demand for electric vehicles softening. However, that negative chatter wasn’t reflected in the sales figures that have just been released. In fact, electric vehicle sales in America surpassed one million units in 2023 for the first time ever, and accounted for 7% of all vehicles sold in the country. Globally, electric vehicles made up 15% of all new passenger vehicles sold, also a record amount. The bottom line is that EV adoption is growing, and likely to accelerate in 2024.

With the world’s largest automakers such as General Motors (NYSE:GM), Toyota (NYSE:TM) and Volkswagen (ETR:VOW3) ramping up their EV output leading up to 2030 and beyond, sales can be expected to continue rising sharply in the coming year. Some commentators are talking about an “EV tipping point.” Governments are helping with consumer adoption worldwide. Canada just became the latest country to announce that all new vehicles sold must be fully electric by 2035.

Tesla Continues to Diversify

Tesla (NASDAQ:TSLA) has a market share problem. At the end of the third quarter of 2023, the electric vehicle maker’s market share in the U.S. stood at 50%, its lowest level on record, and down from 62% in Q1 of last year, according to data from Cox Automotive. That’s a big loss of market share in a short period of time. The situation is likely to worsen as the world’s largest automakers electrify their vehicle fleets. The dominant competitive position that Tesla has enjoyed in the EV space is evaporating, and quickly.

This helps to explain why Tesla is diversifying into areas that have nothing to do with its electric SUVs and newly released Cybertruck. In recent months, Tesla CEO Elon Musk has been talking up the company’s plans to move into artificial intelligence (AI) and has announced that it will spend more than $1 billion on the development of a supercomputer called “Dojo.” In 2024, expect Tesla to continue to diversify into new areas, some of which may have nothing to do with electric vehicles. Residential solar panels anyone?

The Chip Shortage Eases

One of the biggest issues impacting the global automotive industry over the past few years has been a shortage of semiconductors and microchips. This has been a huge problem given that vehicles are becoming increasingly run by computers and connected to the internet. In 2021, the auto industry lost more than $200 billion because of the chip shortage. The year prior, some BMWs (ETR:BMW) were built without touch screens, and Ford (NYSE:F) temporarily closed eight of its plants due to a semiconductor shortage.

In the year ahead, the chip and semiconductor shortage looks likely to finally ease, providing some much needed relief to automakers. Chipmaker Marvell Technology (NASDAQ:MRVL) has said that relief should arrive in 2024, and Infineon Technologies (ETR:IFX), the biggest manufacturer of microchips for the automotive industry, is investing $1 billion to boost its global production. These measures should enable automakers to ramp up production in the year ahead.

On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.