China led the electric vehicle market last year with 60% of total sales globally, a new report said on Wednesday.
Electric car markets are seeing "exponential" growth as sales in 2022 exceeded 10 million globally, or 14% of all new cars sold last year, according to a report by the International Energy Agency, a Paris-based intergovernmental organization.
That’s up tenfold from 1 million sold in 2017. In 2021, the share of electric vehicles in global car sales was 9% and 4% the year before.
“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,” IEA Executive Director Fatih Birol said.
“The trends we are witnessing have significant implications for global oil demand,” he said. “The internal combustion engine has gone unrivaled for over a century, but electric vehicles are changing the status quo.”
Sales are seen growing another 35% this year to reach 14 million, which means almost one in five cars sold this year will be electric, IEA projected.
By 2030, more than one in three new vehicles sold globally will be electric, the report predicted, which will reduce oil demand by 5 million barrels of oil a day, or around 5% of global oil demand today.
That would mean an emissions cut of 700 metric tons of carbon dioxide equivalent by the end of the decade, roughly the annual emissions of Germany or Saudi Arabia.
‘Frontrunner’
The total number of electric cars on the world’s roads today is around 26 million. The figure includes both battery-only models and hybrids that plug in to charge.
China is the “frontrunner” in the electric vehicle market, the report said, mainly due to a government subsidy program.
EVs accounted for 29% of Chinese domestic car sales last year, up from 16% in 2021. That means the world’s second-largest economy has already exceeded its 2025 national target of achieving 20% new energy vehicle sales.
In Europe, the second-largest market, electric car sales increased by over 15% in 2022, while in the third-largest market, the United States, sales jumped 55% in 2022, reaching a sales share of 8%.
The gains come amid a contraction in the overall automotive market. Total vehicle sales last year dipped 3%, the report said.
In Thailand, electric car sales doubled to 21,000, slightly more than 3% of the total car sales in 2022. Chinese carmakers have a monopoly in the Southeast Asian kingdom, primarily due to low prices.
Tesla is planning to enter this year the Thai market, along with building Superchargers.
In India, over half of the country’s three-wheeler registrations in 2022 were electric, according to the study. The government is funding a $3.2 billion incentive program, which attracted $8.3 billion of investment.
By 2035, the European Union plans to discontinue most car sales powered by combustion engines. Meanwhile, the U.S. aims to have 50% of car sales come from electric vehicles by the end of the current decade.
IEA said measures such as the U.S. Inflation Reduction Act, which offers generous subsidies to consumers to switch to electric vehicles, would further boost sales in the coming years.
Edited by Malcolm Foster.