By Jenny Jones

 

A new report, the Global Electric Vehicle Outlook 2022, from the International Energy Agency shows that worldwide sales of EVs doubled in 2021 to set a record of 6.6 million. This brings the total number of EVs on the road worldwide to 16.5 million. However, even with more people driving EVs than ever before, sales must continue to accelerate for countries to reach their existing net-zero carbon dioxide emissions goals by 2050, according to the report.

 

The IEA has released the Global EV Outlook every year since 2013 as part of its Electric Vehicles Initiative, a multigovernmental policy forum dedicated to accelerating EV adoption worldwide. The goal of the annual report is to track and monitor the progress of EV adoption on a global scale. The information helps the IEA guide policymakers on how to further increase EV uptake.

 

Since the IEA published its first report nine years ago, the EV market has grown exponentially. Today, more EVs — including battery electric vehicles and plug-in hybrid electric vehicles — are sold in a single week than were sold in the whole of 2012, said Timur Gül, the head of the IEA’s Energy Technology Policy Division, during a May 23 press conference. “Few areas of clean energy are as dynamic as electric car markets,” Gül said. “Now that the first quarter of 2022 has passed, we still see no sign of slowdown; quite the opposite. Sales were actually up by around three-quarter(s) year-on-year in the first quarter of this year.”

 

Global EV sales growth

 

Interest in EVs has been building for several years. The report shows that in 2020 electric car sales increased worldwide even as overall car sales slowed as a result of the global COVID-19 pandemic. In 2021, overall car sales continued to decrease in some countries while rebounding in others. The market closed the year up about 5%. EV sales accounted for nearly 10% of market share that year, four times their market share in 2019, the report states.

 

Some countries saw greater EV sales increases than others. The report shows that in advanced markets like China and Europe, EV sales accounted for close to 15% of the market share in 2021. In Europe, EV sales increased by more than 65% year-on-year to 2.3 million, contributing to a 2016-21 compound annual growth rate of 61% — the world’s highest. However, China has become the global leader in EV sales, which tripled to 3.3 million in 2021 compared with 2020, bringing the nation’s total fleet to 7.8 million. “More electric vehicles were sold in China in 2021 than in (the rest of) the entire world,” noted Leonardo Paoli, a transport analyst for the IEA and the lead author of the report, during the press conference.

 

In the United States, EV sales are also increasing, albeit more slowly. The nation’s EV sales declined 10% for two consecutive years but rose in 2021. The report states that automakers sold 630,000 EVs in the country that year, more than in 2019 and 2020 combined. The nation now has more than 2 million EVs on the road, with battery-operated EVs accounting for about 75% of new EV sales, up from 55% five years ago. The result is a higher share of battery-operated EVs relative to plug-in hybrid EVs nationwide. “Some of the main drivers underpinning growth in the United States in 2021 were the increased production of Tesla models and the availability of new generation electric models by incumbent automakers,” the report states. “Tesla accounts for over half of all units sold.”

 

Although sales are increasing in many parts of the world, EVs are not a global phenomenon yet, Paoli said. In 2021, “Europe, China, and the United States accounted for 95% of all electric car sales,” he explained. “But when we look at the overall car market, they only account for roughly two-thirds of the total. Progress in electrification has been much slower in most developing and emerging economies where the sales share of electric cars has mostly been below 1%.”

 

Energy targets, oil consumption

 

Recognizing that continued increases in EV sales are necessary for countries to meet their carbon emissions targets, the European Commission has proposed phasing out the internal combustion engine by 2035, and the United States is aiming for EVs to account for 50% of new car sales by 2030. These goals coupled with leading manufacturers’ ambitions to sell several million electric vehicles by the decade’s end will ensure that EV sales continue to rise, Paoli said.

 

Based on existing climate policy pledges, the IEA projects that global electric car sales will rise from below 10% today to about 35% by 2030, bringing 250 million electric cars to the road. While welcomed, this increase is far short of the number needed to achieve net-zero carbon emissions by 2050. To achieve that target, EV sales must reach 60% by 2030, according to the report. Increased manufacturing and adoption of electric trucks could help achieve this target, Paoli said. “Right now, there are roughly 170 different electric truck models that businesses could choose from,” he said. “It is still unclear what role electric and hydrogen fuel cell trucks might take in different countries, but government support for zero-emission trucking is increasing across the board.”

 

In addition to helping countries achieve their emissions goals, expanded EV adoption will reduce the world’s dependence on oil. This benefit has become increasingly relevant in light of Russia’s recent invasion of Ukraine, Gül said. “Electric vehicles already contribute to reducing oil demand today,” Paoli added. “In 2021, roughly 0.3 million barrels of oil per day were displaced by the use of electric vehicles. This was mostly thanks to the use of electric cars and electric buses. With strong expected growth by 2025, around 1.6 million barrels of oil per day could be avoided by electric vehicles. To put it into context, this is roughly … equivalent to the oil consumed in France. By 2030, as much as 4.6 million barrels of oil per day could be avoided by the use of electricity instead of oil.”

 

Supply chain requirements

 

Although EVs reduce the need for oil, their batteries require several minerals, including lithium, nickel, cobalt, manganese, and graphite. These minerals must be mined and then chemically processed and refined to make battery cells, which are assembled into battery packs and integrated into EVs. Nations must develop a global supply chain to support the increased demand for batteries as more EVs come online, Gül said.

 

“The recent strains that we have seen across the supply chains for both conventional as well as electric vehicles are an important signal here that the future needs preparation,” Gül said. “Building a sustainable and resilient value chain will require (the industry) to anticipate potential bottlenecks in particular for the supply as well as the use of critical minerals.”

 

Currently, China is the world leader in EV sales, and it also has the most EV battery manufacturing facilities in the world. “China is home to three-quarters of installed global battery capacity,” Paoli said. “In addition to that, the largest battery manufacturer by volume is Chinese. This capacity will need to expand in the future. To give a sense of scale, today (the globe is) manufacturing roughly 340 GW hours of batteries every year, and by 2030, we could need roughly 10 time more than this. To produce that amount, we would require the full output of roughly 100 giga factories.”

 

Another consideration for scaling EV adoption is raw mineral extraction. Most of the minerals required for battery production come from Australia, South America, Indonesia, Russia, the Democratic Republic of Congo, and China, and as demand for batteries has increased, the cost of these minerals has surged.

 

“The geographical concentration of battery raw material extraction is actually higher than it is for the oil and gas sector,” Paoli said. But, he added, it’s important to remember that there is more than one way to make a battery. “The chemical composition of batteries has greatly evolved over the past five years, and it will certainly continue to do so, thanks to efforts in research and innovation.”

 

Policy recommendations

 

Recognizing that increased adoption of EVs comes with challenges, the IEA report outlines five key policy recommendations for addressing these hurdles. They are:

 

1) Maintain and adapt support for EVs with increasingly stringent CO2 and fuel economy standards.

2) Kick-start adoption of electric trucks using zero-emission vehicle sales mandates, purchase initiatives, and CO2 standards.

3) Promote adoption of EVs in emerging and developing economies.

4) Expand EV charging infrastructure and electricity grids.

5) Develop a strong and resilient EV supply chain.

 

For its part, the IEA will continue to collect and analyze data about EV adoption worldwide and take actions to support governments in expanding EV use around the globe, Gül said.

 

The IEA will continue “working with governments around the world to put in place the right policies to support them, including our Electric Vehicles Initiative, an initiative that is, in this particular time, more important than ever,” Gül said.