Just about 20 percent of all new vehicles sold globally this year will be electric, according to a prediction from the International Energy Agency that was reported by Reuters. On top of that, the agency also predicts that the price of smaller EVs will soon drop low enough to match internal combustion-powered vehicles in North America and Europe.
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The outlet reports that the IEA raised its EV sales forecast partially because of the U.S. Inflation Reduction Act. It supports greener industry and gives consumers pretty sizable incentives when purchasing EVs.
That’s all well and good, but the real electric champion of the world right now is China. Sixty percent of worldwide EV sales took place there, but that’s not all. Battery-electric and plug-in hybrid vehicles in China make up half of all battery powered vehicles in the world right now.
The IEA expects global electric vehicle sales to jump 35 percent this year to 14 million units. That would make up about 18 percent of the passenger car market. That’s a rather staggering number when you take into account the fact that EVs made up just four percent of the market in 2020.
Timar Guell, the IEA’s energy technology policy head, told Reuters that China has also seen prices for some smaller EVs getting closer and closer to the price of their internal combustion counterparts. He added that North America and Europe aren’t too far behind, and neither is the price of larger EVs.
“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… for larger cars like SUVs and pick-ups, purchasing parity is likely to come later, probably in the 2030s,” Guell explained to Reuters.
Still, while prices are coming down for smaller EVs, SUVs and larger vehicles account for nearly two-thirds of all EVs sold in China and Europe, and the number is even higher in the U.S. Based on our tastes, I don’t know if that’s going to change anytime soon.
On the other side of the coin, in emerging and developing markets, two- and three-wheeled electric vehicles are starting to outnumber cars. According to the report, over half of India’s three-wheeler registration in 2022 were electric.
Across the world, governments are investing heavily in electric vehicles and infrastructure to support them. The IEA says that – if everything goes according to plan – demand for oil could fall by five million barrels per day by 2030.