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IEA: Global EV Sales Rose Sharply in 2022, Strong Growth Expected to Continue

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Researched by Industrial Info Resources–High transportation fuel costs and supportive government policies helped push global sales of new electric vehicles (EVs) to more than 10 million units in 2022, a record 14% of all vehicles sold, according to a new report on EVs from the International Energy Agency (IEA) (Paris, France). The 2022 percentage was a sharp uptick over 2021 and 2020 percentages, when only 9% and 5%, respectively, of new cars and trucks sold around the world were powered by electricity, the agency said.

At year-end 2022, roughly 26 million EVs were on the road around the world, the IEA said. The agency projected that worldwide EV sales could grow 30% to 40% per year for the remainder of this decade.

Three markets dominated the global new EV market in 2022: China accounted for about 60% of global new EV units sold, followed by Europe (over 20%) and the U.S. (about 8%). U.S. EV sales remain relatively small in absolute numbers, but its 2022 sales shot up 55% compared to 2021 sales.

Xpeng showroom
Xpeng showroom

The IEA expects worldwide EV sales to accelerate in 2023. With more than 2.3 million units sold in the first quarter, the agency projected full-year 2023 sales could reach 14 million units. If that number is realized, the agency said, electric cars would account for 18% of global vehicle sales during 2023.

A surge in retail gasoline or diesel prices could push those numbers even higher. The IEA credited national policies and incentives with driving demand for electric transport.

“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 in a statement accompanying the report.

“The trends we are witnessing have significant implications for global oil demand,” he continued. “The internal combustion engine (ICE) 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 report cited “ambitious policy programs,” such as the “Fit for 55” package in the European Union and the Inflation Reduction Act (IRA) in the United States, that are expected to further increase market share for electric vehicles this decade and beyond. By 2030, it forecast, EVs will account for around 60% of new vehicle sales in China, Europe and the U.S.

Countries also are taking steps to onshore the EV supply chain. The EU’s Net Zero Industry Act aims for nearly 90% of annual battery demand to be met by domestic battery manufacturers. Similarly, the IRA seeks to strengthen domestic supply chains for EVs, batteries and minerals. The report noted that between August 2022, when the IRA was signed into law, and March 2023, major EV and battery makers announced investments totaling at least $52 billion in EV supply chains in North America.

By focusing on new EV sales and component manufacturing, the report does not address the mining of lithium and other critical minerals needed for EVs. Some experts have fretted that too much money and attention are being spent on “downstream” activities like battery manufacturing and vehicle assembly, while not enough investment and effort have been focused on “upstream” activities like lithium mining. For more on that, see April 3, 2023, article – Lithium Expert Calls for More Mines to Meet Expected Surge in EV Demand.

“There’s no doubt that electrifying transportation will clean the air, but it will pose significant strategic challenges to legacy automakers, OEM (original equipment manufacturer) companies, infrastructure companies and even consumers,” commented David Pickering, Industrial Info’s vice president of research for the Industrial Manufacturing sector. “Globally, companies are committing billions of dollars in capital to capture a slice of this dynamic market. It’s going to be an interesting decade.”

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