Electric vehicle (EV) sales are ramping up and according to the International Energy Agency via a Wednesday report, sales raced to more than 10 million last year, with China accounting for roughly 60% of the market.
The report, the Global EV Outlook, tallies up all EVs, both battery electric and hybrid, and found that sales were up 55% compared to 2021 and by the end of this year are expected to leap another 35%.
“This explosive growth means electric cars’ share of the overall car market has risen from around 4% in 2020 to 14% in 2022 and is set to increase further to 18% this year, based on the latest IEA projections,” the report says.
According to the report, that headlining 10 million number “exceeds the total number of cars sold across the entire European Union (about 9.5 million vehicles) and is nearly half of the total number of cars sold in China in 2022.”
These cars accounted for almost half of the total EVs on the road in 2022, which added up to 26 million.
The electric vehicle revolution is being fueled by heavy-handed incentives around the world and with announced stated policies globally, the IEA says we're looking at a stock of nearly 250 million by 2030 worldwide. However, if announced pledges are added to the mix, we could exceed the number.
Like the United States Inflation Reduction Act (IRA) which helps consumers buy a used or new EV with an up to $7,500 credit, China’s Provinces like Beijing, Shanghai, and Hubei offer varying incentives as national subsidies end. Beijing for example offers 8,000 yuan for deregistering internal combustion engine cars and 10,000 for replacing them with EVs. According to Bloomberg, the incentives helped stimulate 5 billion yuan of electric-car sales in the second half of 2022, the Beijing government reports.
Previously, several initiatives on the part of the Chinese government bolstered manufacturing and adoption in the region early on, leading it to become the leading EV producer in the world. With the domestic incentives for manufacturing in the U.S. in the IRA, the U.S. is attempting to take that crown.
In fact, the IEA estimates that while China will retain its position as the largest market for electric cars with 40% of total sales by 2030, the U.S. will double its market share to 20% by the end of the decade as recent policy announcements drive demand, only bested by Europe’s 25% market share.
But the U.S. and China aren’t the only ones vying to scale EVs. Overall, global spending by governments and consumers on electric cars has significantly increased in the past few years, exceeding a whopping $400 billion in 2022.
According to the IEA’s EV Global Policy Explorer, nine governments passed EV legislation in the first four months 2023 alone, awarding various types of grants, funding, or tax reimbursements for purchasing or manufacturing incentives. This includes the supernational legislation to improve EV access in the EU’s Fit for 55 package and the newly approved Net Zero Industry Act.
On top of that, the IEA points to several countries likely to pass EV legislation in the future, many of which are emerging economies.
Comparatively, in 2022, 20 different governments passed legislation in their home countries with the goal of advancing either the number of EVs on their rodes or the amount produced within their borders. Particularly, the IEA points out the immense growth in India, Indonesia, and Thailand’s markets due to policy support.
Plus, unlike huge markets like the US, EU, and China, the report shows how developing countries see a more diverse electric revolution. Where two- or three-wheel vehicles outnumber cars in many of these countries, their electrification is essential to sustainable development.
India for example, was able to achieve half of 2022’s 3-wheeler registrations as electric, demonstrating their growing popularity, the emergence of non-car EV startups like E-Mobility, Anther Energy, Yulu, and Revamp Moto, and the introduction of electric options from top bikemaking companies like Hero.
In 2023, the IEA estimates that worldwide EV sales will reach 14 million.
“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 IEA Executive Director Fatih Birol in a statement.
“Cars are just the first wave: electric buses and trucks will follow soon,” she added.
There is currently a big industry push toward electric SUVs and electric pickups, and just yesterday California approved the world’s first ban on diesel trucks (including semi-trucks, garbage trucks, and buses) and the nation’s first train emissions standards and with seven other states susceptible to following suit. With the developments, Birol may be hinting at a similar boom to happen for electric buses and trucks.
Image Credit: IEA (Left: Electric bus registrations and sales share by region, 2015-2022
Right: Electric truck registrations and sales share by region, 2015-2022)
“The trends we are witnessing have significant implications for global oil demand," she said. "The internal combustion engine has gone unrivaled for over a century, but electric vehicles are changing the status quo. By 2030, they will avoid the need for at least 5 million barrels a day of oil.”