Global Electric Car Sales To Grow By 35% To Reach 14 Million In 2023 – Report


Global sales of electric cars are set to surge to yet another record this year, expanding their share of the overall car market to close to one-fifth and leading a major transformation of the auto industry that has implications for the energy sector, especially oil.

The new edition of the IEA’s annual Global Electric Vehicle Outlook shows that more than 10 million electric cars were sold worldwide in 2022 and that sales are expected to grow by another 35% this year to reach 14 million. This explosive growth means electric cars’ share of the overall car market has risen from around 4% in 2020 to 14% in 2022 and 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,” said IEA Executive Director Fatih Birol. “The trends we are witnessing have significant implications for global oil demand. The internal combustion engine has gone unrivalled for over a century, but electric vehicles are changing the status quo. By 2030, they will avoid the need for at least 5 million barrels a day of oil. Cars are just the first wave: electric buses and trucks will follow soon.”

The overwhelming majority of electric car sales to date are mainly concentrated in three markets – China, Europe and the United States. China is the frontrunner, with 60% of global electric car sales taking place there in 2022. Today, more than half of all-electric cars on the road worldwide are in China. Europe and the United States, the second and third largest markets, both saw strong growth with sales increasing 15% and 55% respectively in 2022. 

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Ambitious policy programmes in major economies, such as the Fit for 55 package in the European Union and the Inflation Reduction Act in the United States, are expected to further increase the 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 United States is set to rise to around 60%.

The encouraging trends are also having positive knock-on effects on battery production and supply chains. The new report highlights that announced battery manufacturing projects would be more than enough to meet the demand for electric vehicles by 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 EV market in years to come. The EU’s Net Zero Industry Act aims for nearly 90% of annual 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. Between August 2022, when the Inflation Reduction Act was passed, and March 2023, major EV and battery makers announced investments totalling at least USD 52 billion in EV supply chains in North America.

Despite a concentration of electric car sales and manufacturing in only a few big markets, there are promising signs in other regions. 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. In India, the government’s USD 3.2 billion incentive programme, which has attracted investments worth USD 8.3 billion, is expected to increase battery manufacturing and EV rollout substantially in the coming years.

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In emerging and developing economies, the most dynamic area of electric mobility is two- or three-wheel vehicles, which outnumber cars. For example, over half of India’s three-wheeler registrations in 2022 were electric, demonstrating their growing popularity. In many developing economies, two- or three-wheelers offer an affordable way to get access to mobility, meaning their electrification is important to support sustainable development.

Sales of electric three-wheelers, which play an important role in urban mobility in India for both cargo and passenger services, soared to 425 000 units in 2022. Sales have been strong in India for a number of years, with hundreds of thousands of electric three-wheelers sold every year since 2012, with the exception of 2020, when the Covid-19 pandemic reduced sales volumes to 30% of the previous year.

Over half of India’s three-wheeler registrations in 2022 were electric, demonstrating their growing popularity due to government incentives and lower lifecycle costs compared with conventional models, as well as higher fuel prices. IEA analysis on the TCO in India suggests that electric three-wheelers are already 70% cheaper than their gasoline-power ICE equivalents over their lifetime (IEA, forthcoming).

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Policies including the purchase incentives under FAME II, supply-side incentives under the PLI scheme, tax benefits and India’s Go Electric campaign all contributed to reducing the higher upfront costs (see Policy developments and corporate strategy for a detailed discussion of these and other policies). A total of 15 Indian states have already adopted EV policies to promote stronger EV deployment (and many more are drafting them), the majority of which include additional demand incentives. Bulk procurement schemes, the emergence of the battery-as-a-service (BaaS) business model and India’s draft battery-swapping policy all give further impetus to the rapidly rising sales of electric three-wheelers.

China followed India in terms of electric three-wheeler sales, with nearly 350 000 units sold in 2022. Together, China and India accounted for nearly 99% of global electric three-wheeler sales.

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