Demand for Electric vehicles is booming globally, says IEA
In its latest report, the International Energy Agency projected that EV sales are expected to leap by 35% this year, to reach 14 million .
In an online press briefing launching the Global EV Outlook 2023 report, IEA’s executive director Fatih Birol said, “Of all car sales worldwide in 2019, only 2% were EV sales. In 2023, this number will grow to 18%.”
Most of these sales are driven by China, with 60% of global electric car sales taking place there in 2022, Birol said. China is followed closely by Europe and the USA respectively. Birol added that by 2030, even with existing policy measures taken by governments, the share of EV sales will increase drastically.
By 2030, the average share of electric cars in total sales across China, the EU and the USA is set to rise to around 60%. Because 40% of the global oil demand comes from road transportation, 5mn barrels of oil a day can be avoided by 2030, thanks to the growing demand for EVs.
Moreover, governments in the Middle East are encouraging EVs to grow. In Saudi Arabia for example, the country will manufacture its own EVs, with companies such as Foxconn and Ceer. In the UAE, government-owned entity Dubai Silicon Oasis has partnered with Schneider Electric to install charging stations, while ADNOC announced a 70,000 electric vehicle charging point plan.
Bruno Idini, analyst at IEA, said that in Jordan, battery electric vehicles went from 10% of total vehicle sales in 2021 to 30% in 2022. They reached 40% of total sales in the first three months of 2023. Jordan also lowered the purchase tax on electric vehicles to just 10%, which was previously 25%. This has reduced prices significantly.
Adding to the briefing, IEA’s head of energy technology policy Timur Gül, said that EVs have an advantage in the second-hand market as they have higher resale value compared to traditional vehicles.
The significant increase in lithium supply has also helped carmakers, he said, adding that the “electrification of transport is not just about cars.” In countries such as India and Vietnam, two and three-wheelers are already significantly electrified and the market for such vehicles is promising.
The report also highlighted that announced battery manufacturing projects would be more than enough to meet demand for electric vehicles by 2030 in the IEA’s Net Zero Emissions by 2050 Scenario.
However, some challenges remain. “Infrastructure needs to match government targets and policy making,” said Gül.
In Jordan for example, charging stations in Jordan are very scarce, with only 54 in 2022. Even these are mostly privately owned. But more permits for the construction of 92 new charging stations have been issued, out of which three quarters will be made for public use.
EVs are still not affordable, and costs increase when prices of batteries and minerals increase. Manufacturing is also highly concentrated, with China dominating the battery and component trade – and increasing its share of global electric car exports to more than 35% last year.
Despite this, some trends are promising. Carmakers also want to fully electrify EVs, meaning that they could be made smaller and cheaper. Battery manufacturing capacity has also increased.
“Clean energy is growing faster than what policymakers believe,” said Birol. “Solar panel installation, heat pumps, and offshore wind energy apart from EVs are gaining significant importance,” he concluded.
