More than one in three new vehicles sold by 2030 will be electric thanks to “explosive” market growth, according to the International Energy Agency (IEA).
The influential Paris-based group says electric cars are already on track to account for 18% of sales by 2023. With new policies driving growth in the US and EU, the proportion of electric models in 2030 it will be more than double. what was expected just two years ago.
The expansion means that demand for petroleum-based fuels such as petrol and diesel in the road transport sector will begin to decline in just two years. About 5% of current oil demand will have been wiped out by 2030, he adds.
The IEA’s new Global EV Outlook report concludes that by the end of the decade, electric car sales are on track to reduce the equivalent annual emissions of Germany’s entire economy.
However, the agency notes that the growing popularity of sport utility vehicles (SUVs) is a “major concern.” Last year, growth in sales of these large, energy-guzzling models nearly canceled out emissions reductions from record sales of electric vehicles.
Exponential growth
By 2022, more than 10 million electric cars were sold, reducing global emissions by 80 million tonnes of CO2 equivalent (MtCO2e), according to the IEA.
The agency adds that sales are expected to reach 14 million by the end of this year. This would account for 18% of global car sales in 2023, up from 14% the previous year and just 1% in 2017.
On this trajectory, these vehicles will have almost quadrupled their market share since 2020, when they represented less than 5% of sales.
The “exponential” growth in electric car sales can be seen in the chart below. China (red) has consistently dominated the market, accounting for approximately 60% of global sales by 2022.
Sales of electric cars between 2010 and 2023, million cars. Figures for 2023 are IEA estimates. Source: IEA.
The other two key players are the US and the EU, which recently increased their 2030 targets to reduce emissions from road transport. In recent months, the IEA notes that both have “passed legislation to match their electrification ambitions”.
According to the new report, a combination of the new CO2 targets for cars and vans in the EU and the package of new measures in the Inflation Reduction Act combined with actions at state level will continue to drive sales of electric cars in the coming years years.
Under the IEA’s Stated Policy Scenario (STEPS), which takes into account policies and measures put in place by governments, the market share of electric cars will double to 36% by 2030. This reduces the “implementation gap” between actions and targets set by governments, which in total would raise this quota to 40%.
As the chart below indicates, this is a significant upward adjustment from the agency’s previous outlook. In its 2021 projections, the IEA said electric cars would reach 15% of sales by 2030, a level almost reached as early as 2022. Last year, the IEA said existing policies would lead the share of electric cars to only 21% in 2030.
Outlook for the share of electric vehicles in global global sales, %, 2020-2030, in the IEA’s Stated Policy Scenario (STEPS), based on successive editions of the agency’s reports on “Global Outlook for electric vehicles”. Each line indicates the perspective given in this year. Source: IEA. Chart by Joe Goodman for Carbon Brief with Highcharts.
In addition to governments, car manufacturers have also announced their own electric vehicle sales targets.
The chart below shows how the targets set by these original equipment manufacturers (OEMs) compare to the commitments announced (yellow dots) and acted upon (green dots) by governments. It indicates that the ambitions of companies are in line or, in the case of Europe, slightly ahead of governments.
Automakers’ 2030 targets for EV sales shares in 2030 (grey area) and sales shares in the IEA’s STEPS and Announced Pledges (APS) scenarios. Source: IEA.
The IEA notes that in all major markets, these company targets have come after major government policy announcements and net zero targets, “showing how political ambitions can spur corporate announcements”.
Deep cuts
The rapid growth of electric car sales under existing government policies is expected to have a significant impact on fossil fuel use. The IEA says oil demand for road transport is expected to peak around 2025 under the STEPS scenario.
Increasing electric vehicles on the road would eliminate the need for 5 million barrels of oil per day by 2030. That’s about 5% of current global oil demand.
The IEA notes that, overall, this would reduce emissions by 700 million tonnes of carbon dioxide equivalent (MtCO2e) by the end of the decade, roughly the annual emissions of Germany or Saudi Arabia.
(This figure takes into account the fossil fuels used in the generation of electricity to run the fleet of electric cars).
(The IEA’s emissions calculations are based on analysis of car fuel consumption, rather than full life-cycle emissions. However, even when emissions from the battery and car manufacturing, electric vehicles have significantly lower emissions than their fossil-fueled counterparts under most circumstances.)
If governments go further and meet the targets that have been set for both electric vehicles and clean energy generation, 770 MtCO2e of emissions would be avoided.
In this scenario, called the Announced Pledges Scenario (APS), nations would be about two-thirds of the way to the IEA’s 2050 net zero emissions (NZE) scenario, which meets the warming objective of 1.5 °C of the Paris Agreement.
To bridge the remaining gap, shown in red in the chart below, the IEA says governments should move faster to decarbonise trucks and buses in particular.
It points out that 25% of the emissions related to electric vehicles avoided in the NZE can be attributed to the electrification of heavy vehicles.
Avoided net emissions from the deployment of electric vehicles, 2022-2030, in the three future IEA scenarios. These include a net zero scenario by 2050 (NZE), government pledges (APS) and government policies that have been implemented (STEPS). Source: IEA.
Mastery of SUVs
According to the IEA, continued growth in sales of large sport utility vehicles (SUVs) nearly wiped out the emissions cuts achieved by electric vehicle sales last year.
SUVs now account for almost half of global car sales, including 40% of electric vehicles. They are growing in popularity all over the world, especially in the US, Europe and India.
The IEA says this “overwhelming domain” is a “significant concern”. The size of SUVs means they require more energy to run, more materials to build and, in the case of electric models, larger batteries. All this means more emissions and a greater environmental impact per mile traveled.
By 2022, CO2 emissions from driving SUVs rose by 70 MtCO2e, according to the IEA, and sales grew even as the wider car market contracted. This effectively cancels out most of the 80 MtCO2e emissions reductions from new electric vehicle sales that year.
Overall, the IEA says that 330m SUVs on the road today emit around 1 GtCO2e.
About 16% of SUVs sold in 2022 were electric, slightly above the 14% share of electric vehicles in the overall market. As the chart below shows, an increasing proportion of electric cars on the market in all countries are SUVs or other large cars.
Number of different electric car models available in selected countries by size in 2018 and 2022. Source: AIE.
As with other electric vehicles, these electric SUVs cause emissions to shift relative to if they had a combustion engine. By 2022, the IEA says 150,000 barrels of oil a day were avoided because of people driving electric SUVs.
In fact, the agency says that while electric SUVs accounted for 35% of all electric cars by 2022, their share of oil displacement was higher at around 40%, as drivers of SUVs tend to use their cars more than owners of smaller cars.
However, the report notes that in addition to driving emissions, “mitigating the impacts of higher battery sizes will also be important.” He notes that the larger amounts of minerals needed to build SUV batteries can result in CO2 emissions from processing and manufacturing more than 70% higher than normal electric car batteries.
This article was first published by Carbon Brief
