Global sales of electric cars are set to surge to yet another record this year, says the International Energy Agency (IEA).

The newest edition of the agency’s ‘Global Electric Vehicle Outlook’ report notes that electric cars will expand their share of the overall car market to close to 20%, in a major transformation that has implications for the energy sector, especially oil.

The report shows that more than ten-million electric cars were sold worldwide last year, and that sales are expected to grow by another 35% this year to reach 14-million units.

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

“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,” says IEA executive director Fatih Birol. 

“The trends we are witnessing have significant implications for global oil demand. 

“By 2030, [electric vehicles] will avoid the need for at least five-million barrels a day of oil. And cars are just the first wave – electric buses and trucks will follow soon.”

The IEA report shows that the overwhelming majority of electric car sales to date are mainly concentrated in three markets – China, Europe and the US. 

China is the frontrunner, with 60% of global electric car sales taking place there last year. 

Today, more than half of all electric cars on the road worldwide are in China. 

Europe and the US, the second and third largest markets, both saw strong growth, with sales increasing 15% and 55% respectively in 2022. 

Ambitious policy programmes in major economies, such as the Fit for 55 package in the EU and the Inflation Reduction Act in the US, are expected to further increase market share for electric vehicles this decade and beyond. 

By 2030, the average share of electric cars in total sales across China, the EU and the US is set to rise to around 60%.

These trends also have knock-on effects for battery production and supply chains. 

The new report highlights that announced battery manufacturing projects would be more than enough to meet demand for electric vehicles to 2030 in the IEA’s Net Zero Emissions by 2050 Scenario. 

However, manufacturing remains 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.

Other economies have announced policies to foster domestic industries that will improve their competitiveness in the electric vehicle market in years to come. 

The EU’s Net Zero Industry Act aims for nearly 90% of yearly battery demand to be met by domestic battery manufacturers. 

Similarly, the US Inflation Reduction Act places emphasis on strengthening domestic supply chains for EVs, batteries and minerals. 

Under the IEA Stated Policies Scenario, the global outlook for the share of electric car sales based on existing policies and firm objectives has increased to 35% in 2030, up from less than 25% in the previous outlook.

Also, based on existing policies, oil demand from road transport is projected to peak around 2025.

The report also notes that the number of available electric car models reached 500 last year, which is more than double the options available in 2018. 

However, outside of China, there is a need for vehicle manufacturers to offer affordable, competitively priced options in order to enable mass adoption of electric vehicles, notes the IEA.

SA vs India
Despite a concentration of electric car sales and manufacturing in only a few big markets, there are promising signs in other regions, says the IEA.

Electric car sales more than tripled in India and Indonesia last year, albeit from a low base, and they more than doubled in Thailand. 

The share of electric cars in total sales rose to 3% in Thailand, and to 1.5% in India and Indonesia. 

A combination of effective policies and private sector investment is likely to increase these shares in the future, says the IEA.

In India, the government’s $3.2-billion incentive programme, which has attracted investments worth $8.3-billion, is expected to increase battery manufacturing and electric vehicle rollout substantially in the coming years.

South Africa still has no electric vehicle policy.

Just more than 500 electric vehicles were sold in South Africa in 2022, out of a total of more than 528 000-unit sales.