IEA: ‘explosive’ growth of global EVs to a record share

The latest study from the International Energy Agency (IEA) reveals a significant jump in the adoption of electric cars around the globe. In a year-on-year comparison, the share has risen from 9% in 2021 to 14% in 2022, a new record. Expectations for this year are a further rise of 35%.

In its yearly ‘Global EV Outlook 2023’ report, the IEA analyzes the worldwide transition to electric driving, which occurs at different speeds in different parts of the world. Compared to last year, the registrations have surpassed the mark of 10 million vehicles, translating into a rise of no less than 55%.

The report was released on Wednesday and made predictions about the current year. Based on the results from the first quarter, with 2,3 million EVs already registered,  the electric category will reach 14 million units, reaching 18% of the overall market.

Plug-in hybrids included

Though the IEA talks about electric cars in the report, it is worth noting that the study addresses electrified vehicles, which include plug-in hybrid vehicles (PHEV). Also, last year the automotive industry was still hampered by the supply chain shortage and the chip crisis, affecting output, although electric vehicles were prioritized.

Looking at the geographical differences in uptake, China is in the lead. The nation of President Xi, where PHEVs play a significant role in the automotive market, accounts for a whopping 60% of overall global EV sales.

The IEA expects that the rise for this year will grow by a further 30%, making one-third of every car sold in China plugged. More than half of the world’s electric sales already occur in the People’s Republic. Export of its electric car production is at 35%, while the country dominates the battery and component industry.

Europe in second place

Accelerated by their incentive policies, the EU – with the Net Zero Industry Act – follows in second place (+15%), followed by the US with the Biden Inflation Reduction Act, where American customers accounted for a rise of 55% in a year-on-year comparison. Moreover, in Europe, one in five cars sold is now electric, while in the USA, the ratio is one in eight.

Though the rich and developed markets account for the most significant shares (they are also the prime emitters of carbon dioxide), similar patterns are witnessed elsewhere in the world. For example, electric car sales tripled in India last year, doubling in Thailand. Though the percentual shares remain modest, 1,5% in India and 3,0% in Thailand, signs are positive, according to the IEA.

Zooming out on the trend unveils how ‘explosive’ the overall growth is, as the IEA likes to address the evolution. Compared to 2017, the share of electrified cars is now ten times bigger.

Sufficient supportive industry

Looking forward to 2030, the IEA expects no discrepancy between the adoption rate and the switch to a battery ecosystem that must support the growth and is predominantly located in Asia.

The organization points to Europe’s and US strategies for developing an appropriate local value chain. However, constructing factories is a less time-consuming operation than developing mines. This means the dependence on foreign sourcing of critical materials will take longer than the end of the decade.

IEA Executive Director Fatih Birol also shed light on the side-effects of the global electric adoption on the oil industry: “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. By 2030, they will avoid needing at least 5 million barrels a day of oil.”