The International Energy Agency (IEA) forecast on Wednesday that nearly a fifth of cars sold globally this year will be electric, with prices for small electric vehicles falling to rival internal combustion engine vehicles in North America and Europe by the mid-2020s.
IEA executive director Fatih Birol said on a media conference call that the agency raised its forecast for electric vehicle sales in part because of the U.S. Inflation Reduction Act, which supports green industries and subsidizes consumer purchases of electric vehicles (EVs).
According to the IEA’s annual outlook for electric vehicles, China stands out, accounting for half of the electric vehicles on the world’s roads, including pure electric vehicles and plug-in hybrids, and 60% of electric vehicle sales last year came from China.
Timar Guell, head of energy technology policy at the IEA, said the price of some small electric car models in the country was also gradually becoming lower than that of their internal combustion engine counterparts.
According to the report, global electric vehicle sales are expected to surge 35% this year to 14 million units, accounting for 18% of the passenger car market, compared with only 4% in 2020.
“Our current expectation is that we could see price parity for small electric vehicles in North American and European markets in the mid-2020s… For larger vehicles such as SUVs and pickup trucks, purchase parity may occur later, possibly into the 2030s,” Guell said.
Birol said that due to environmental concerns, governments are investing in the expansion of electric vehicles to promote industrial policy and reduce dependence on oil, which will reduce oil demand by 5 million barrels per day by 2030 due to the transition to electric vehicles.
SUVs and large cars account for nearly two-thirds of electric vehicles in China and Europe, and an even higher share in the United States.
In emerging and developing economies, there are more electric two- and three-wheelers than cars. More than half of three-wheelers registered in India in 2022 will be electric, studies show.
© Thomson Reuters 2023
