Global demand soars for electric cars with sales set to rise 35% this year, IEA says
Global electric car sales are set to surge by 35 per cent this year, helped by government subsidies and the tightening of carbon dioxide emissions standards, the International Energy Agency has said.
Sales are projected to reach 14 million in 2023 from 10 million last year, the Paris-based agency said in its Global Electric Vehicle Outlook, which was published yesterday.
This means the share of electric cars in the overall market will rise to 18 per cent this year, from 14 per cent in 2022, the agency said.
“Electric vehicles are one of the driving forces in the new global energy economy that is rapidly emerging – and they are bringing about a historic transformation of the car manufacturing industry worldwide,” said the agency’s executive director Fatih Birol.
“The trends we are witnessing have significant implications for global oil demand. The internal combustion engine has gone unrivalled for over a century, but electric vehicles are changing the status quo.
“By 2030, they will avoid the need for at least five million barrels a day of oil. Cars are just the first wave: electric buses and trucks will follow soon.”
China, the world’s manufacturing hub, accounted for 60 per cent of global electric car sales in 2022, the agency’s figures showed.
Last year, electric car sales in the US grew by 55 per cent, while in Europe they increased by 15 per cent.
“Ambitious policy programmes in major economies, such as the Fit for 55 package in the EU and the Inflation Reduction Act in the US, are expected to further increase market share for electric vehicles this decade and beyond,” the agency said.
The share of electric cars in total car sales in China, the EU and the US is estimated to rise to about 60 per cent by 2030, the report added.
This rise in EV sales is also having “positive knock-on effects” for battery production and supply chains.
Battery manufacturing projects that have been announced worldwide would be “more than enough” to meet the demand for EVs until 2030 under the agency’s net-zero emissions by 2050 scenario, the report predicted.
However, manufacturing remains “highly concentrated”, with the battery and component trade being dominated by China, which increased its share of global electric car exports to more than 35 per cent last year, it added. “Other economies have announced policies to foster domestic industries that will improve their competitiveness in the EV market in years to come,” said the IEA.
The US Inflation Reduction Act, which was enacted last year, offers a series of tax incentives wind, solar, hydro power and other renewables – as well as a push towards greater EV ownership.
Between August 2022, when the act was passed, and March, major EV and battery makers announced investments totalling at least $52 billion in EV supply chains in North America, the agency said.
Meanwhile, electric car sales more than tripled in India and Indonesia last year, with their share in total sales rising to 1.5 per cent, it added.
In Thailand, the share of electric cars in overall sales rose to 3 per cent.
“A combination of effective policies and private sector investment is likely to increase these shares in the future,” the agency predicted.
In 2019, India – the world’s largest market for two-wheelers – approved a programme that would direct $1.4 billion to subsidise sales of electric and hybrid vehicles to curb pollution and reduce reliance on fossil fuels.
“In emerging and developing economies, the most dynamic area of electric mobility is twoor three-wheel vehicles, which outnumber cars there,” the IEA report said.
The agency said the electrification of two-wheelers such as motorbikes is important in order to “support sustainable development”.
Last year, electric car sales in the US grew by 55 per cent, while in Europe they increased by 15 per cent