The electric car industry is expected to break another sales record this year, according to a new report from the International Energy Agency (IEA).
The report states that over 10 million electric cars were sold globally in 2022, with projections that sales will increase by 35% this year, reaching 14 million. This means that sales of electric cars have increased from 4% of the overall car market in 2020 to 14% in 2022.
Moreover, IEA’s recent projections show a further increase to 18% of all cars sold worldwide this year.
IEA Executive Director Fatih Birol highlights that electric vehicles are leading a historic transformation of the car manufacturing industry. These trends have far-reaching implications for the energy sector, particularly in regard to the demand for oil.
Birol predicts that by 2030, electric vehicles will help to reduce the need for oil by at least 5 million barrels of oil per day.
Electric cars are booming – global sales are on course to jump 35% this year
In 2019, only 2.5% of cars sold worldwide were electric
In 2023, they're set to reach 18%
— Fatih Birol (@fbirol) April 26, 2023
China first among the three major EV markets
Electric car sales are primarily concentrated in three regions – China, Europe, and the United States. China leads the pack, accounting for 60% of global electric car sales in 2022.
More than half of all electric cars in use worldwide are in China. The second and third largest markets are Europe and the United States, which saw sales rise by 15% and 55%, respectively, in 2022, says IEA’s report.
Major economies are adopting ambitious policy programs to increase the market share of electric vehicles in the coming years. In the European Union, the Fit for 55 package, and in the United States, the Inflation Reduction Act are expected to contribute to this growth.
By 2030, the combined average share of electric cars in total sales across China, the EU, and the United States is set to reach around 60%, according to IEA’s report.
‘IEA’s Net Zero Emissions’ scenario
The report says that there will be enough batteries made to power all the electric cars we need until 2030. This is part of a plan to achieve zero harmful emissions by 2050.
However, most of the batteries are being made in one place, China. They also make many of the parts needed for electric cars and sold over 35% of all-electric cars in the world last year.
Other countries are trying to make more batteries themselves to be more competitive in the electric car market. The European Union intends to manufacture almost all of its batteries on its own soil.
Moreover, the United States is trying to make their own supply chains for electric cars, batteries, and minerals.
Since a new law was passed in August 2022, companies that make electric cars and batteries have said they will spend at least 52 billion dollars to increase production in North America by March 2023, according to IEA.