Global Electric Car Sales Surge
Electric car sales around the world are surging, and are set to hit another global record in 2023 after a record-breaking 2022, according to the International Energy Agency, a global think-tank focused on energy security and helping the world transition to clean energy. Globally, electric cars now represent close to 20 percent of the overall car market, which is leading to a major transformation of the auto industry – as well as the energy sector.
The agency’s latest Global Electric Vehicle Outlook, an annual study that surveys the market for electric cars, shows that:
- More than 10 million electric cars were sold around the world last year.
- Early sales numbers from 2023 indicate that sales are expected to grow by another 35 percent this year, which would bring the global EV sales number to over 14 million units.
- The share of the overall car market occupied by electric vehicles has risen from just 4 percent in 2020 to 18 percent in 2022.
More than 10 million electric cars were sold around the world last year. Moreover, early sales numbers from 2023 indicate that sales are expected to grow by another 35 percent this year, which would bring the global EV sales number to over 14 million units. Overall, the share of the overall car market occupied by electric vehicles has risen from just 4 percent in 2020 to 18 percent in 2022.
U.S. Electric Car Sales Growth
Growth in electric car sales is being driven by three major markets. China accounts for over 60 percent of EV sales globally, with dozens of manufacturers introducing hundreds of new models every year. Today, almost half of the world’s electric cars drive on Chinese roads. European electric car sales increased by 15 percent over 2021, while sales growth in the U.S. was stunning, up 55 percent compared to the prior year.
Interestingly, while much of the messaging around electric cars is around energy efficiency, SUVs and large cars dominated the available electric vehicle options last year – accounting for almost two-thirds of the available EV options globally. In the U.S., the share of EVs occupied by large vehicles was even higher, emulating the general trend towards SUVs powered by gasoline engines.
This isn’t the most efficient approach: electric SUVs generally have batteries that are two or even three times larger than the batteries in small cars, requiring more critical minerals. On the other hand, electric SUVs did result in the displacement of over 150,000 barrels of oil consumption per day in 2022. They also helped avoid the associated tailpipe emissions that would have been generated through burning the fuel in combustion engines.
A trend towards large cars and SUVs isn’t surprising, however: battery-electric cars are still more expensive to develop and produce than the Internal Combustion Engine (ICE) vehicles we’ve become used to over the last 100 years. But as manufacturers gain more experience, as EV sales increase, and as more efficiencies of scale are realized, consumers will have more choice from vehicles in more segments of the market. Indeed, the study showed that consumers around the world could choose from over 500 different models in 2022 – more than double the choice they had in 2018.
That said, the study showed that the majority of affordable EVs were available in China – with fewer competitively priced options in more mature markets. And the available electric car options is still much lower than the number of ICE options on the market, even as they steadily decrease. A look at GreenCars’ list of upcoming new models for 2023 and beyond still skews towards the large and expensive – but more affordable models will be introduced over time.
2023 Electric Cars: New Models
A look at GreenCars’ list of upcoming new models for 2023 and beyond still skews towards the large and expensive – but more affordable models will be introduced over time.
The IEA says that it expects electric car sales to continue to strengthen in 2023. Over 2.3 million electric cars were sold in the first quarter globally, about 25 percent more than in the same period in 2022. National policies and incentives are helping to drive more sales, particularly in the U.S. and Europe, where ambitious policy programs could push the average share of electric car sales to 60 percent globally by 2030. A rise in oil prices as was seen in 2022 could further motivate buyers to make the move to an EV.
Electric Car Batteries: Production
Will there be enough EV batteries to actually build all of these electric cars? IEA says recently-announced battery manufacturing projects should provide more than enough EV battery capacity to meet EV demand until 2030. However, manufacturing remains highly concentrated, with China dominating the trade, claiming a 35 percent share of the global battery market last year. However, a number of North American manufacturers have made significant investments which will come online before 2030, helping to balance out the load – and make the vehicles in which the batteries are installed eligible for government incentives.
The upshot of IEA’s study is that electric cars are a driving force in the new global energy economy – and are transforming the manufacturing industry worldwide. The shift towards EVs will also have major implications for global oil demand. While the combustion engine has not had a rival for over 100 years, electric cars are changing the status quo, and according to the IEA, will help avoid the need for at least five million barrels a day of oil.