More than one in five cars sold around the globe in 2024 are expected to be electric, according to a new report from the International Energy Agency (IEA), with yearly EV sales set to reach 17 million.
The latest edition of the IEA’s annual Global EV Outlook published on Tuesday shows that, despite near-term challenges across some markets, particularly in the US, the planet’s electric fleet continues growing – led, unsurprisingly, by China, where almost one in 3 cars on the roads by 2030 are set to be electric.
Headlines repeatedly cast doubt on the continued strength of EV growth, with tight margins, volatile battery metal prices, increasing inflation around the globe, and the phase-out of purchase incentives in some countries all highlighted as proof that the pace of growth will slow.
The evidence displayed by the IEA suggests another story, with electric car sales growing by around 25 per cent in the first quarter of 2024, compared to the first quarter of 2023, in line with the year-on-year growth seen in the same period in 2022.
Importantly, while growth is in line with previous years, the IEA points out that growth in 2024 is spread across a larger base, with the number of EVs sold around the globe in the first three months of 2024 “roughly equivalent” to the number of EVs sold in the whole of 2020.
Further, by year’s end, the IEA predicts that the market share of EVs could reach up to 45 per cent in China, 25 per cent in Europe, and over 11 per cent in the United States, “underpinned by competition among manufacturers, falling battery and car prices, and ongoing policy support.”
“The continued momentum behind electric cars is clear in our data, although it is stronger in some markets than others,” said Fatih Birol, IEA executive director.
“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.”
Predictions for 2024 sales build on an already strong 2023, which saw the sale of EVs near 14 million and account for 18 per cent of all cars sold, up from 14 per cent in 2022 – a difference which amounted to 3.5 million more EVs sold in 2023 than in 2022, a 35 per cent year-on-year increase.
As central EV markets including China, Europe, and the United States shift into a new phase, the continued pace of EV uptake will be determined by the pace of sales in emerging and developing economies.
Even as the vast majority of EV sales in 2023 were in China (60 per cent), Europe (25 per cent), and the United States (10 per cent), these three regions only accounted for around 65 per cent of total car sales worldwide, “showing that car sales of electric models remain more geographically concentrated” than conventional internal combustion engine (ICE) vehicles.
Nevertheless, growth is picking up outside of the major markets, such as in Vietnam and Thailand, which saw EV sales account for 15 per cent and 10 per cent of all new cars sold in 2023.
The IEA’s Global EV Outlook makes very little mention of Australia (where recent monthly data suggests an EV share of around 10 per cent of the new car market), outside its role as a supplier of key EV battery materials, and even then, the IEA highlights the pressures causing several Australian mineral giants to revisit performance and growth forecasts.
Further growth in the global sale of EVs is expected to materialise as substantial investment in the EV supply chain and ongoing policy support ramp up in conjunction with declines in the price of EVs and their batteries.
By 2035, according to the IEA’s assessment of current policy settings, every other car sold around the globe will be electric by 2035. However, if the announced energy and climate pledges of countries are met in full and on time, or in three cars sold in 2035 could be electric – a scenario which would avoid the need for up to 12 million barrels of oil per day.
The IEA also found that the world’s capacity to produce batteries for electric vehicles is “well positioned to keep up with demand,” even as demand rises “sharply over the next decade.”
The purchase price of EVs, however, will remain a hurdle unless EV manufacturers take action. This is especially the case for European and American automakers who will have to contend with more affordable EVs coming out of China, where more than 60 per cent of EVs sold in 2023 were already less expensive to buy than conventional ICE equivalents.
Intensifying market competition and improving battery technologies “are expected” to help reduce EV prices in Western markets in the coming years, according to the IEA, as will pressure from Chinese automakers who are more and more exporting their vehicles to Western markets.
Joshua S. Hill is a Melbourne-based journalist who has been writing about climate change, clean technology, and electric vehicles for over 15 years. He has been reporting on electric vehicles and clean technologies for Renew Economy and The Driven since 2012. His preferred mode of transport is his feet.