04/27/2023
Source: Energy & Management Powernews
The boom in electric vehicles has far-reaching implications for the global energy industry, according to research by the International Energy Agency (IEA).
In 2022, 10 million electric cars were sold worldwide, and the International Energy Agency (IEA) expects that figure to reach 14 million in 2023. As a result, the market share of electric vehicles rose from 4 percent in 2020 to 14 percent last year and is expected to reach 18 percent this year, according to the IEA's "Global EV Outlook 2023."
China led the way in 2022, registering 60 percent of all new electric cars. More than half of all electric cars are now driven in the People's Republic. The EU and the U.S. ranked second and third in terms of registrations. In Europe, registrations rose by 15 percent, in the USA by 55 percent. This means that in the EU, one in five newly registered cars was an electric car; in the U.S., the figure was 8 percent. Drivers spent $425 billion on electric cars, 50 percent more than the previous year. 10 percent of that was subsidies. Most of the vehicles were electric SUVs, the report adds. However, smaller and more competitive models are increasingly coming to market, it said. Meanwhile, while twice as many EV models were offered as in 2018, the low-cost options were not enough "to establish a mass market for electric cars," it said.
Electric vehicles, however, have become a defining factor in the energy industry, IEA Director Fatih Birol said at the launch of the report in Paris. Ambitious climate change programs such as the U.S. Inflation Reduction Act and the EU's Fit for 55 program would further accelerate the e-car trend, leading to six out of 10 new passenger vehicles in China, the EU and the U.S. having electric powertrains by 2030. This prospect is a strong incentive to invest in the production of batteries and other components, he said. He said the battery factories planned so far are "more than sufficient to meet the demand by 2030 for electric vehicles." However, he said, battery production remains highly concentrated: China is by far the leading producer of batteries, it said, and is expected to increase its share of global exports to 35 percent by 2030.
The share of e-vehicles is also increasing in emerging markets
In other regions, significant efforts are being made to avoid becoming dependent on Chinese supplies. In this context, the IEA points to the EU's net-zero program for European industry, under which 90 percent of European demand for batteries is to be met from its own production. The U.S., it said, is also making great efforts to meet its own needs. Since the IRA was passed last August, he said, U.S. manufacturers have announced investments of $52 billion to expand battery production in the United States.
In other parts of the world, too, there are early signs of a trend toward electric mobility, he said. In Thailand, for example, 3 percent of e-cars were sold in 2022, while in India and Indonesia the figure was as high as 1.5 percent. From an Indian incentive program, the IEA expects investments of $8.3 billion to expand battery production. This would also accelerate the sale of electric vehicles in India. In the emerging markets, the focus is also on the electrification of two- and three-wheelers. In India, for example, around half of all three-wheelers are already electric. In many countries of the developing world, two- and three-wheelers are an "affordable means of mobility. Electrification of these vehicles is therefore an important lever for sustainable development, he said.
In the industrialized countries, the IEA assumes that the electrification of private transport is just the beginning of electromobility. In the coming years, buses and trucks would also be increasingly equipped with electric drives. For the energy industry, this would mean above all a decline in demand for fossil fuels. As early as 2030, oil consumption will be 5 million barrels per day lower. Electricity consumption, on the other hand, will be between 950 and 1,150 TWh higher. That would be less than 4 percent of global electricity production on average, just under 5 percent in the EU and more than 5 percent in the US. As a result, CO2 emissions would be about 700 million tons lower.
Author: Tom Weingärtner
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