Electric Vehicles

Countries and regions making notable progress to advance electric cars include: 

• Norway continues to lead in rates of electric vehicle (EV) deployment, with the share of electric car sales reaching 88% in 2022. 
• China accounted for nearly 60% of all new electric car registrations globally in 2022. The share of electric cars in total domestic car sales reached 29% in China in 2022, up from 16% in 2021, thereby achieving the 2025 national target of a 20% sales share for so-called new energy vehicles (NEVs)¹ well in advance. 
• The European Union adopted new CO₂ standards for cars and vans in March 2023, which require a 55% and 50% reduction in emissions of new cars and vans by 2030 (compared to 2021), and 100% for both by 2035. 
• In the United States, the Inflation Reduction Act (IRA) has triggered a rush by global electromobility companies to expand US manufacturing operations. Between August 2022 and March 2023, major EV and battery makers announced cumulative post-IRA investments of USD 52 billion in North American EV supply chains, of which 50% is for battery manufacturing, and about 20% each for battery components and EV manufacturing.

¹ NEVs (China) include BEVs, PHEVs and fuel-cell electric vehicles.  

Electric car sales saw another record year in 2022, achieving a 14% sales share, despite supply chain disruptions, macro-economic and geopolitical uncertainty, and high commodity and energy prices. The growth in electric car sales took place in the context of globally contracting car markets: total car sales in 2022 dipped by 3% relative to 2021. Electric car sales – including battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) – exceeded 10 million last year, up 55% relative to 2021.  

In the course of just 5 years, from 2017 to 2022, EV sales jumped from around 1 million to more than 10 million. It previously took 5 years from 2012 to 2017 for EV sales to grow from around 100 000 to 1 million, underscoring the exponential nature of EV sales growth.  

In the Net Zero Scenario, electric car sales reach around 65% of total car sales in 2030. To get track with this scenario, electric car sales must increase by an average of around 25% per year from 2023 to 2030. For comparison, electric car sales increased by 55% in 2022 compared to 2021. 

Electrification is happening in other vehicle segments, though in 2022 the electric sales share of buses and trucks was only around 4% and 1%, respectively.  

For further data on historical and projected EV sales and stock, see the IEA Global EV Data Explorer. 

The global EV fleet consumed about 110 TWh of electricity in 2022, which accounts for less than 0.5% of current total final electricity consumption worldwide. The use of EVs displaced around 0.7 Mb/d (1.3 EJ) of oil in 2022.  

EVs would need to displace around 8 Mb/d (17 EJ) of oil in 2030 to be in step with the Net Zero Scenario.  

The lithium-ion automotive battery manufacturing capacity in 2022 was roughly 1.5 TWh. According to Benchmark Mineral Intelligence (as of May 2023), the announced battery production capacity by private companies for EVs to be in place by 2030 amounts to 6.9 TWh.  

In the Net Zero Scenario, battery demand for EVs, across all road segments, reaches around 5.5 TWh in 2030. Assuming an average utilisation rate of battery production facilities of 85%, announced capacity in 2030 would cover requirements in the Net Zero Scenario (6.5 TWh of capacity).  

Critical mineral price volatility and supply chain constraints pose a possible obstacle in achieving the EV deployment levels needed to get on a pathway aligned with the Net Zero Scenario. Today, lithium-ion batteries account for almost the entire EV battery market, and most of the common chemistries rely on the critical minerals lithium, cobalt and nickel. In 2022, lithium iron phosphate (LFP) batteries – the only lithium-ion battery chemistry which does not use nickel or cobalt – reached their highest market share of the past decade, at just under 30%. This was in part due to price volatility of battery metals, making LFP batteries more attractive despite their lower energy density.  

Supply chains for sodium-ion (Na-ion) batteries – currently the only viable lithium-free battery alternative – are also being established, with over 100 GWh of manufacturing capacity operating or announced. The Na-ion battery developed by China’s CATL is estimated to cost 30% less than an LFP battery, however, the current energy density of these batteries is lower than that of even the least energy-dense lithium-ion batteries.  

While most charging demand is currently met by home charging, publicly accessible chargers are increasingly needed in order to provide the same level of convenience and accessibility as for refuelling conventional vehicles. At the end of 2022, there were 2.7 million public charging points worldwide, more than 900 000 of which were installed in 2022, an increase of about 55% on 2021 stock. At the end of 2022 China was home to about two-thirds of the global stock of public chargers. Europe ranks second, with around 540 000 total public chargers in 2022, a 50% increase from the previous year. 

By 2030, the Net Zero Scenario sees the installation of 17 million publicly available charging stations, which would entail a considerable increase on the 900 000 annual additions witnessed in 2022.  

Newly adopted and proposed GHG standards and zero-emission vehicle (ZEV) mandates will ensure increased adoption of EVs in the future. Recent examples include: 

• California, historically a leader in ZEV policy, in 2022 and 2023 adopted new ZEV mandates for cars and trucks that set a minimum ZEV sale shares for passenger light-duty vehicles (LDVs) ranging from 35% in 2026 to 100% in 2035, and sets milestones for the sale of zero-emission heavy-duty vehicles (HDVs) that reach 100% between 2035 and 2042, depending on the vehicle segment. 
• European Union CO₂ standards for cars and vans, adopted in March 2023, require a 55% and 50% reduction in emissions of new cars and vans, respectively, by 2030 (compared to 2021), and 100% for both by 2035. In February 2023, the European Commission released proposed revisions of the regulation on HDV emissions that would increase targets for CO₂ emissions reductions to 45% by 2030 relative to 2019, 65% by 2035, and 90% by 2040. 
• The United States Environmental Protection Agency proposed in April 2023 new GHG emissions standards for light- and medium-duty vehicles, which would reduce model year 2032 fleet emissions by 56% and 44% relative to the current model year 2026 standards. 
  

Governments are increasingly announcing policies to support EV supply chains, including vehicle and battery manufacturing as well as critical mineral supply chains. Such policies include: 

• The Indian Production Linked Incentive Scheme on Advanced Chemistry Cell Battery Storage was announced in late 2021 with the aim of reaching a cumulative 50 GWh in domestic manufacturing. A similar scheme on Automobile and Auto Components has the goal of encouraging industry investment in domestic vehicle and vehicle component manufacturing.  
• The United States Inflation Reduction Act (IRA), passed in August 2022, introduced conditions for the consumer Clean Vehicle Tax Credit, including that vehicle final assembly must occur in North America. Meeting these conditions opens eligibility for an incentive of up to USD 7 500 per vehicle: USD 3 750 if the battery meets the critical mineral requirement, and another USD 3 750 if it meets the component requirement.²  
• The European Union proposed the Net Zero Industry Act in March 2023, which aims for nearly 90% of the European Union’s annual battery demand to be met by domestic manufacturers, with a combined manufacturing capacity of at least 550 GWh in 2030, in line with the objectives of the European Battery Alliance. 

² This requirement stipulates that: 1) in 2023, 40% or more of the battery critical minerals must be extracted or processed in the United States or a US free trade agreement partner country, or have been recycled in North America, gradually increasing to 80% in 2027 and beyond; and 2) in 2023, 50% of the value of the components in the battery must be manufactured or assembled in North America, gradually increasing to 100% in 2029 and beyond. 

Global spending on electric cars was up 50% in 2022 relative to 2021, reaching around USD 425 billion. Most of this was directly spent by consumers when buying a vehicle, while governments spent around USD 40 billion through direct purchase incentives. The increase in global spending on electric cars means that carmakers – including incumbents – are generating more revenues from EV sales, thereby progressively reducing reliance on sales of internal combustion engine (ICE) vehicles to finance EV manufacturing, R&D and new model development. While there is still a long way to go, this is an important step for EV growth and the transition to fully electrified road transport. 

Over the 2017-2022 period, the share of government spending in total spending decreased from over 20% to just under 10%. In 2023 and beyond, governments in major EV markets are continuing to phase out subsidies for electric cars, suggesting government spending will decrease in those markets. However, incentives in markets where adoption has been lower to date, including in emerging market and developing economies (EMDEs) such as India, Indonesia and Thailand, could increase overall government spending. 

The number of multilateral initiatives and pledges focusing on electromobility has increased rapidly in the last decade. This reflects government support around the world for accelerating the transition to zero-emission transport and is an encouraging sign that international collaboration has a strong role to play in decarbonisation. To increase the impact of such initiatives, member countries should ensure that such schemes complement each other, and identify where in the EV value chain they should focus. 

Major initiatives include: 

• The Accelerating to Zero (A2Z) coalition, officially launched in November 2022, aims for all sales of new cars and vans globally to be ZEVs by 2040, and by no later than 2035 in leading markets. 
• The Zero-Emission Government Fleet Declaration, signed in September 2022, aims to reach 100% zero-emission cars and vans in government fleets, with an additional aspiration of 100% zero-emission trucks and buses acquisitions, by no later than 2035. 
• The Zero-Emission Vehicle Emerging Markets Initiative, launched in November 2022, aims to enhance co-operation between public and private actors in EMDEs to accelerate the transition to zero-emission road transport. 
• The Global Memorandum of Understanding (MoU) on Zero-Emission Medium- and Heavy-Duty Vehicles was launched in 2021, with signatories committing to work together to achieve 100% ZEV bus and truck sales by 2040, with an interim goal of 30% by 2030. In 2022, an additional 11 countries and territories signed the MoU, bringing the total number of signatories to 27, which combined account for over 15% of total annual sales of new medium- and heavy-duty vehicles worldwide. 
  

Voluntary announcements of EV targets have become increasingly common across the automotive industry, with major new original equipment manufacturer (OEM) announcements made at the global level and regionally in 2022-2023.