IEA: Electric car sales to rise 21 percent year on year to 17 million vehicles this year

Electric car sales are set to rise significantly worldwide this year despite unfavorable conditions in some markets, according to a report published today by the International Energy Agency (IEA). The agency says affordability and charging infrastructure will be key to future growth. According to the IEA, 17 million electric cars will be sold this year, compared with 14 million last year. One in every five cars sold will be electric. Ten million of these vehicles are expected to be sold in China. Overall, this trend is reducing oil demand in road transport.

“Low margins, volatile prices for metals used in battery production, high inflation and the gradual phaseout of purchase incentives in some countries have raised concerns about the pace of growth in the industry. Global sales figures, however, remain strong,” the IEA said in its Global Electric Vehicle Outlook report.

Sales in the first quarter of this year rose 25 percent compared with the same period last year. Sales grew at the same rate in the first quarter of last year, but from a smaller vehicle base. Sales in the first quarter of this year were equivalent to those for all of 2020, the IEA noted.

The agency also points out in its report that electric cars’ share of total sales will vary significantly by region: in the United States, one in nine cars sold will be electric, compared with one in four in Europe, while half of all cars sold in China will be electric. The expansion of electric cars in Europe is being held back by “a generally weak outlook for passenger car sales and the gradual phaseout of subsidies in some countries,” the agency said.

According to the IEA, affordability compared with conventional vehicles remains key to the industry’s growth. Prices vary significantly by region. In Europe and the United States, internal combustion cars remain more affordable than their electric counterparts. In China, almost two thirds of electric cars sold last year were cheaper than cars with internal combustion engines.

“Electric cars are generally becoming cheaper as battery prices fall, competition intensifies and carmakers achieve economies of scale,” the IEA said.

In some cases, prices stagnated or even rose slightly between 2018 and 2022 after adjusting for inflation.

Meeting growing demand with charging infrastructure will also be a major challenge. The number of charging stations will need to increase sixfold by 2035.