According to the International Energy Agency (IEA), global electric vehicle (EV) sales are projected to increase by more than 20% this year, reaching a total of 17 million units. The surge in demand for EVs is primarily being driven by the market in China, which is currently the world's largest EV market.
The IEA's report highlights the significant impact that the growing popularity of EVs will have on the global auto industry and the reduction of oil consumption for road transport. The agency predicts that by 2035, half of all cars sold worldwide will be electric, provided that the charging infrastructure keeps pace with the increasing adoption of EVs.
The optimistic outlook for EVs comes amidst financial challenges faced by automakers, with profit margins being squeezed due to price wars and intensifying competition in the market. Despite these challenges, global EV sales saw a 35% growth last year, totaling nearly 14 million units.
Tesla, the world's leading EV manufacturer, recently reduced prices in major markets to counter declining sales and competition from Chinese upstarts and established carmakers. Similarly, Chinese EV maker Li Auto also slashed prices on key models in China, signaling the competitive landscape in the EV market.
The IEA emphasizes the importance of automakers in driving the adoption of EVs globally, highlighting that affordability will play a crucial role in the transition to electric vehicles. The agency expects that market competition and advancements in battery technologies will lead to a decrease in EV prices in the coming years.
China remains a key player in the EV market, with over 60% of EVs sold in the country last year being more affordable than conventional cars. By 2030, nearly one-third of all cars on Chinese roads are expected to be electric, significantly impacting both the auto industry and the energy sector.
As the shift towards EVs accelerates, the IEA warns that policy support and strategic planning are essential to ensure that the increasing demand for electricity from charging stations does not strain existing electricity grids. The agency projects that the number of public EV charging points worldwide will reach 15 million by the end of the decade, a substantial increase from previous years.
