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 by 35% in 2023 to reach 14 million. These numbers reveal that 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 International Energy Agency’s latest projections. The agency asserts that electrification is set to avoid the need for 5 million barrels of oil a day by 2030.
The majority of 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 on the road; Europe and the United States, which in 2022 experienced sales growth of 15% and 55%, respectively.
Electric vehicles are one of the driving forces in the new global energy economy.Fatih Birol, IEA Executive Director
This trend is having positive effects on battery production and supply chains. In this regard, the IEA report highlights that the battery manufacturing projects announced would be sufficient to meet the demand for electric cars until 2030 towards the 2050 decarbonization scenario. By 2030, the average share of electric cars in total sales across China, the EU and the United States is set to rise to around 60%.
Production remains highly concentrated in China, which leads the marketing of batteries and components and increased the share of global exports of electric cars to more than 35% in 2022. To encourage domestic markets, the European Union has announced the Net Zero Industry Act and the United States has implemented the Inflation Reduction Act.
“EV’s are bringing about a historic transformation of the car manufacturing industry worldwide,” said IEA Executive Director Fatih Birol. “The trends we are witnessing have significant implications for global oil demand. The internal combustion engine has gone unrivaled for over a century, but electric vehicles are changing the status quo. Cars are just the first wave: electric buses and trucks will follow soon.”
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 places emphasis on strengthening domestic supply chains for EVs, batteries and minerals. Between August 2022, when the Inflation Reduction Act was passed, and March 2023, major EV and battery makers announced investments totaling at least USD 52 billion in EV supply chains in North America.
Despite the concentration of electric vehicle sales and manufacturing in large markets, the report reflects other regions with promising figures. This is the case of 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. India’s government incentive program in this regard has attracted investment and is expected to substantially increase battery manufacturing and electric vehicle deployment in the coming years. The government’s USD 3.2 billion incentive program, which has attracted investments worth USD 8.3 billion, is expected to increasing battery manufacturing and EV rollout substantially in the coming 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 in 2022 were electric.