According to the International Energy Agency (IEA), electric car sales are expected to surge by 35% this year to 14 million, which will make up 18% of the global passenger car market. The prices of smaller electric vehicle (EV) models are set to drop and become competitive with combustion engine cars in North America and Europe by the mid-2020s. The IEA raised its EV sales forecasts, citing the US Inflation Reduction Act, which supports green industries and subsidises consumer purchase of EVs.
China is a significant player in the EV market and accounts for half of the EVs on the road worldwide, including battery-electric cars and plug-in hybrids. Last year, China had 60% of EV sales. The IEA’s annual outlook on EVs showed that some smaller EV models’ prices in China were edging lower toward those of their combustion engine cars.
The IEA’s energy technology policy head, Timar Guell, stated that “our current expectation is that we can see price parity in small and medium-sized electric cars in North America and European markets somewhere in the mid-2020s.” However, for larger cars like SUVs and pick-ups, purchasing parity is likely to come later, probably into the 2030s.
Governments worldwide are investing in EV expansion out of concerns over the environment, to boost industrial policy and decrease dependency on oil, demand for which will fall by 5 million barrels a day by 2030 due to the EV transition. Nearly two-thirds of EVs in China and Europe are SUVs and large cars, with a greater proportion in the United States.
In emerging and developing economies, two- or three-wheel electric vehicles outnumber cars. Over half of India’s three-wheeler registrations in 2022 were electric, according to the study.
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