Electric car sales surged by 55% last year to surpass 10 million, and China led the way: IEA

FAN Editor

Electric vehicles from Tesla photographed in China. The world’s second largest economy is a major player when it comes to the sale of electric vehicles.

Vcg | Visual China Group | Getty Images

Electric car sales jumped to more than 10 million last year, with China accounting for roughly 60% of the market, according to a report from the International Energy Agency published Wednesday.

The record sales figures, contained within the IEA’s Global EV Outlook for 2023, continue a trend of sustained growth for the industry.

“Electric car sales — including battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) — exceeded 10 million last year, up 55% relative to 2021,” the IEA’s report said.

“This figure — 10 million EV sales worldwide — exceeds the total number of cars sold across the entire European Union (about 9.5 million vehicles) and is nearly half of the total number of cars sold in China in 2022,” it added.  

The IEA defined “sales” within its report as being “an estimate of the number of new vehicles hitting the roads.”

In total, it said more than 26 million electric cars were on the world’s roads in 2022, which represents a 60% increase relative to 2021.

Plug-in hybrid electric vehicles, or PHEVs, have an internal combustion engine as well as a battery-powered electric motor.

Some regard them as an important tool in the transition toward low- and zero-emission forms of transport. Others, including organizations such as Greenpeace UK, take a dim view of them.

Read more about electric vehicles from CNBC Pro

Looking ahead, the Paris-based IEA — seen by many as an authoritative voice on the energy transition — said it was estimating worldwide sales to reach almost 14 million in 2023.

“This explosive growth means electric cars’ share of the overall car market has risen from around 4% in 2020 to 14% in 2022 and is set to increase further to 18% this year, based on the latest IEA projections,” a statement accompanying the report noted.  

Chinese market dominant

The IEA described China as being “the frontrunner” when it came to electric car sales. It added that over 50% of electric cars on the road could now be found in the world’s second-largest economy.    

“In Europe, the second largest market, electric car sales increased by over 15% in 2022, meaning that more than one in every five cars sold was electric,” the IEA said, adding that U.S. electric car sales had risen by 55% in 2022.

Read more about China from CNBC Pro

“Electric vehicles are one of the driving forces in the new global energy economy that is rapidly emerging – and they are bringing about a historic transformation of the car manufacturing industry worldwide,” Fatih Birol, the IEA’s executive director, said.

“The trends we are witnessing have significant implications for global oil demand,” he added.

“The internal combustion engine has gone unrivalled for over a century, but electric vehicles are changing the status quo.”

“By 2030, they will avoid the need for at least 5 million barrels a day of oil. Cars are just the first wave: electric buses and trucks will follow soon.”

Unlocking India’s potential

While China, Europe and the U.S. are big players when it comes to electric cars, the IEA noted that other parts of the world were also showing “promising signs.”

“Electric car sales are generally low outside the major markets, but 2022 was a growth year in India, Thailand and Indonesia,” it said. “Collectively, sales of electric cars in these countries more than tripled compared to 2021, reaching 80,000.”

India was seeing a “ramping up” of both EV and component manufacturing, Wednesday’s report said. This had been backed by a $3.2 billion incentive program from the Indian government, which had in turn led to $8.3 billion of investment.   

Challenges ahead

The past few years have seen a number of large economies lay out plans to ramp up the number of EVs on their roads.

The U.K., for instance, wants to stop the sale of new diesel and gasoline cars and vans by 2030 and will require, from 2035, all new cars and vans to have zero tailpipe emissions.

The European Union, which the U.K. left on Jan. 31, 2020, is also looking to reduce emissions from road based transportation.

And over in the U.S., California — America’s most populous state — is banning the sale of new gasoline-powered vehicles by 2035.

While there is excitement about the potential of low- and zero-emission vehicles, the shift away from cars powered by fossil fuels won’t always be smooth.

There are concerns, for example, that the lower noise levels of EVs may pose a challenge to people with sight problems. In addition, talk of a skills gap is sparking discussions about cost and safety, while ensuring charging infrastructure is accessible to all is another area to watch.

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