New report: Strong growth for the world’s electric car fleet

– Instead of slowing down, it looks like the global electric car revolution is preparing for a new phase of growth, says the head of the international energy agency IEA.

The occasion is that the IEA today launched its annual report Global EV Outlook.

Thus, the IEA goes against more pessimistic electric car statements from, among other things, the European car industry. In the first quarter of 2024, strong growth is seen in the sales of electric cars and plug-in hybrids compared to the same period the previous year.

There is therefore nothing in the figures to indicate that electric car sales are about to level off.

The report shows that after the corona epidemic, car sales have picked up again, but fossil car sales have suffered a permanent setback. There are now 20 percent fewer fossil fuel cars sold in the world than in the peak year of 2018.

Strong electric car growth towards 2030 will significantly reduce oil consumption

The IEA predicts that, despite some challenges in the short term in some markets, it is expected, with current policies, that close to 1 in 3 cars on the road in China in 2030 will be electric cars or plug-in hybrids.

And correspondingly: Almost 1 in 5 cars on the roads in both the EU and the USA will be electric cars or rechargeable hybrids in 2030.

Already this year, it is expected that more than 1 in 5 cars sold worldwide will be electric cars or plug-in hybrids. In 2035, the IEA expects the figure to increase to 1 in 2, with the current political framework conditions. Or even higher if the announced climate ambitions from various countries are to be believed.

The report from the energy experts predicts that over the next decade this will both change the global car industry and also significantly reduce oil consumption for road transport.

Huge Chinese market, but more markets are growing

The IEA estimates that sales of electric cars and plug-in hybrids in China will pass 10 million already this year, accounting for around 45 percent of car sales. In China, around 60 percent of the electric cars and plug-in hybrids sold were cheaper than their fossil fuel competitors.

Electric car sales have long been concentrated in the three major markets of China, Europe and the USA, but now the growth has spread to more.

In growing economies such as Vietnam and Thailand, electric cars and plug-in hybrids accounted for 15 and 10 percent of new car sales respectively in 2023.

Three trends give reason for optimism

In the report, the IEA looks at several trends that give reason for optimism:

• Large investments in the value chain for electric cars.
• Political instruments to promote electric car sales.
• Fall in the prices of electric car and battery production.

– The wave of investments in battery production indicates that the supply chain for electric cars is trying to meet the car manufacturers’ ambitious plans for expansion, says IEA CEO Faith Birol in a press release.

He points out that there has been a high level of investment in battery production over the past five years to keep up with demand, which will also continue to increase in the next decade.

And the IEA chief continues:

– This shift will have major consequences for both the car industry and the energy sector.