Vehicle to grid

Q1 EV sales match all of 2020 as demand surges amid investment: IEA

Q1 EV sales match all of 2020 as demand surges amid investment: IEA
(Photo by Oxana Melis on Unsplash)

More than one in five cars sold worldwide this year is expected to be electric, with demand projected to surge over the next decade, according to the latest edition of the International Energy Agency’s (IEA) annual Global EV Outlook.

The latest edition finds that global electric car sales are set to reach around 17 million by the end of the year. In the first quarter, sales grew about 25% compared with the same period in 2023 – similar to the growth rate seen in the same period a year earlier, but from a larger base. The number of electric cars sold globally in the first three months of this year is roughly equivalent to the number sold in all of 2020, the report says.

In 2024, electric car sales in China are projected to hit 10 million, accounting for about 45% of all car sales in the country. In the United States, roughly one in nine cars sold are projected to be electric – while in Europe, despite a “generally weak” outlook for passenger car sales and the phase-out of subsidies in some countries, electric cars are still set to represent about one in four cars sold.

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Last year, global electric car sales soared by 35% to almost 14 million. While demand remained largely concentrated in China, Europe, and the United States, growth also picked up in some emerging markets such as Vietnam and Thailand, where electric cars accounted for 15% and 10%, respectively, of all cars sold.

“Substantial” investment in the electric vehicle supply chain, ongoing policy support, and declines in the price of EVs and their batteries are expected to produce even more significant changes in the years to come, IEA said. The Outlook says under today’s policy settings, every other car sold globally is set to be electric by 2035. Meanwhile, if countries’ announced energy and climate pledges are met in full and on time, two in three cars sold will be electric by 2035.

“The continued momentum behind electric cars is clear in our data, although it is stronger in some markets than others,” said IEA Executive Director Fatih Birol. “Rather than tapering off, the global EV revolution appears to be gearing up for a new phase of growth. The wave of investment in battery manufacturing suggests the EV supply chain is advancing to meet automakers’ ambitious plans for expansion. As a result, the share of EVs on the roads is expected to continue to climb rapidly. Based on today’s policy settings alone, almost one in three cars on the roads in China by 2030 is set to be electric, and almost one in five in both the United States and European Union. This shift will have major ramifications for both the auto industry and the energy sector.”

The report finds that manufacturers have taken notable steps to help strengthen the EV ambitions of governments, including by making financial commitments. Thanks to high levels of investment over the past five years, the world’s capacity to produce batteries for EVs is “well positioned” to keep up with demand, even as it rises sharply over the next decade, the report says. However, the pace of the transition to EVs may not be consistent and will hinge on affordability, IEA said.

In China, more than 60% of electric cars sold in 2023 were already less expensive to buy than their conventional equivalents. However, in Europe and the United States, the purchase prices for cars with internal combustion engines remained cheaper on average, though intensifying market competition and improving battery technologies are expected to reduce prices in the coming years, IEA said.

Growing electric car exports from Chinese automakers, which accounted for more than half of all electric car sales in 2023, could add to downward pressure on purchase prices. Chinese companies, which are also setting up production facilities abroad, have already seen strong sales of more affordable models launched in 2022 and 2023 in overseas markets.

Ensuring that the availability of public charging keeps pace with electric vehicle sales is crucial for continued growth, according to the report. The number of public charging points installed globally was up 40% in 2023 relative to 2022, and growth for fast chargers outpaced that of slower ones. However, to meet a level of electric vehicle deployment in line with the pledges made by governments, charging networks need to grow sixfold by 2035. At the same time, policy support and careful planning are essential to make sure greater demand for electricity from charging does not overstretch electricity grids.

The full report is available here.

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