The International Energy Agency (IEA) has published its Global Electric Vehicle Outlook report, predicting a 35% surge in global electric vehicle sales in 2023, driven by government subsidies and tighter emissions standards. The report estimates that 14 million electric vehicles will be sold in 2023, up from 10 million in 2022, accounting for an 18% share of the overall market, up from 14% in 2022. The report highlights that the rise of electric vehicles is one of the driving forces of the emerging global energy economy, which will lead to a historic transformation of the car manufacturing industry worldwide. The IEA’s executive director, Fatih Birol, notes that this trend will have significant implications for global oil demand, as electric vehicles will avoid the need for at least five million barrels of oil per day by 2030.
China continues to dominate the global electric vehicle market, accounting for 60% of electric car sales in 2022. However, sales in Europe and the US grew by 15% and 55% respectively in the same year. The report also highlights that ambitious policy programmes in major economies, such as the EU’s Fit for 55 package and the US’s Inflation Reduction Act, will further increase the market share of electric vehicles in the coming years. The share of electric cars in total car sales in China, the EU and the US is estimated to rise to about 60% by 2030, according to the IEA.
The rise of electric vehicles is also having a positive impact on battery production and supply chains. The report notes that battery manufacturing projects that have been announced worldwide would be more than enough to meet the demand for electric vehicles until 2030, under the agency’s net-zero emissions by 2050 scenario. However, the report highlights that the manufacturing of batteries and components remains highly concentrated, with China dominating the market.
The IEA notes that other economies have announced policies to foster domestic industries that will improve their competitiveness in the electric vehicle market in years to come. The report highlights that the US’s Inflation Reduction Act, enacted last year, has already led to a significant push towards EV ownership, with major EV and battery makers announcing investments totalling at least $52 billion in EV supply chains in North America between August 2022 and March 2023.
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