More than 10 million electric cars were sold worldwide in 2022, according to the IEA’s annual Global Electric Vehicle Outlook, and sales are expected to grow 35% by 2023 to reach 14 million. These figures reveal that the share of electric cars in the global car market has increased from around 4% in 2020 to 14% in 2022 and is set to increase further to 18% this year, according to the latest projections of the International Energy Agency. The agency says electrification is designed to avoid the need for 5 million barrels of oil per day by 2030.
Most electric car sales are mainly concentrated in three markets: China, which accounted for 60% of global sales last year and where more than half of all electric vehicles in operation globally are in the road; Europe and the United States, which by 2022 saw sales growth of 15% and 55%, respectively.
Electric vehicles are one of the drivers of the new global energy economy.
Fatih Birol, Executive Director of the IEA
This trend is having positive effects on battery production and supply chains. In this regard, the IEA report highlights that the announced battery manufacturing projects would be sufficient to cover the demand for electric cars until 2030 towards the decarbonisation scenario of 2050. In 2030, the average share of electric cars in total sales in China, the EU and the United States will increase by about 60%.
Production remains highly concentrated in China, which leads the market for batteries and components and increased its share of global electric car exports to more than 35% by 2022. To encourage domestic markets, the European Union has announced the Net Zero Industry Act and the The United States has implemented the Inflation Reduction Act.
“Electric vehicles are driving a historic transformation of the automotive manufacturing industry worldwide,” said IEA Executive Director Fatih Birol. “The trends we are witnessing have important implications for global oil demand. The internal combustion engine has been unrivaled for more than a century, but electric vehicles are changing the status quo. Cars are just the first wave: electric buses and trucks will soon follow.”
The EU’s Net Zero Industry Act aims for nearly 90% of annual battery demand to be met by domestic battery manufacturers. Similarly, the US Inflation Reduction Act emphasizes strengthening domestic supply chains for electric vehicles, batteries and minerals. Between August 2022, when the Inflation Reduction Act was passed, and March 2023, major electric vehicle and battery manufacturers announced investments totaling at least $52 billion in supply chains of electric vehicles in North America.
Despite the concentration of sales and manufacturing of electric vehicles in large markets, the report reflects other regions with promising figures. This is the case in India and Indonesia, where sales tripled, and Thailand, where they doubled.
The share of electric cars in total sales increased to 3% in Thailand and 1.5% in both India and Indonesia. According to the IEA, the combination of effective policies and private sector investment could multiply these results. The Indian government’s incentive program in this regard has attracted investment and is expected to substantially increase battery manufacturing and EV deployment in the coming years. The government’s $3.2 billion incentive program, which has attracted $8.3 billion worth of investment, is expected to substantially increase battery manufacturing and the rollout of electric vehicles over the next few years.
In emerging and developing economies, the most dynamic area of electric mobility is two- and three-wheelers, which outnumber passenger cars. More than half of three-wheeler registrations in India by 2022 were electric.
