Released April 23, 2024 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Worldwide electric vehicle (EV) sales could reach a record of around 17 million units this year, which would be an increase of approximately 21% over 2023's record sales level of about 14 million units, according to a new report from the International Energy Agency (IEA) (Paris, France). EV purchases in 2023 were highly concentrated in China (60%), Europe (25%) and the U.S. (10%), the agency said. China is expected to account for a sharply reduced percentage of global EV sales this year, down to about 45%, but the percentages going to Europe and the U.S. are expected to be about the same as last year.
The IEA report, Global EV Outlook 2024, said that a broader and faster global uptake will require more affordable vehicles and a dramatic expansion of the EV charging network. The report was released on Tuesday.
China continues to be the dominant market for EV sales, reaching about 3 million units in 2021, 6 million in 2022 and 8.1 million in 2023. This year, new EV sales there are expected to approach 10 million units. Europe is projected to remain the second-largest market for new EV sales this year, and the U.S. a distant third.
Click on the image at right to see historical and projected 2024 EV sales by global region.
"The continued momentum behind electric cars is clear in our data, although it is stronger in some markets than others," IEA Executive Director Fatih Birol said in a statement accompanying the report. "Rather than tapering off, the global EV revolution appears to be gearing up for a new phase of growth. The wave of investment in battery manufacturing suggests the EV supply chain is advancing to meet automakers' ambitious plans for expansion. As a result, the share of EVs on the roads is expected to continue to climb rapidly."
"Based on today's policy settings alone," he continued, "almost one in three cars on the roads in China by 2030 is set to be electric, and almost one in five in both the United States and European Union. This shift will have major ramifications for both the auto industry and the energy sector."
"Electric cars continue to make progress towards becoming a mass-market product in a larger number of countries," the IEA report said. "Tight margins, volatile battery metal prices, high inflation, and the phase-out of purchase incentives in some countries have sparked concerns about the industry's pace of growth, but global sales data remain strong."
The same China-Europe-U.S. dominance of sales continued in the first quarter, the IEA report said. First-quarter EV sales rose about 25% over the year-earlier quarter.
Click on the image at right to see quarterly sales of EVs, by global region, including a prediction for first-quarter sales.
If the IEA's predicted record 2024 sales materialize, that "robust growth" would suggest that many major markets will have entered a new phase, "with uptake shifting from early adopters to the mass market."
EVs are getting larger around the world. In 2018, about 75% of the EVs sold worldwide were categorized as "small" or "medium" sized vehicles. But gradually since then, "small" and "medium" vehicles have lost market share to "large" vehicles and sport utility vehicles (SUVs), a trend typified by U.S. and European sales. A growing share of new EV sales in China are deemed to be "large" vehicles and SUVs, mirroring what has happened in Europe and the U.S. and tipping the global scales to those larger models.
Click on the image at right to see the relative size of EVs sold in the three largest markets have changed since 2018.
The Paris energy agency has used three scenarios to assess the world's progress in limiting greenhouse gas emissions (GHGs). It used those three scenarios to project future sales of non-internal combustion engines, essentially battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs).
The three IEA scenarios are:
In the STEPS case, the global stock of EVs across all models, including EVs and PHEVs but excluding two- and three-wheeled vehicles, grows from less than 45 million in 2023 to 250 million in 2030 and 525 million in 2035, an average annual growth rate of about 23%.
The APS case increases average annual sales by 1%, to 24%, with the result being 585 million vehicles operating by 2035. In the NZE case, EV sales grow an average of 27% per year, which would push total global EV stock to about 790 million by 2035. Both of those cases similarly include EVs and PHEVs but exclude two- and three-wheeled vehicles.
The rapid uptake of EVs of all types--cars, vans, trucks, buses and two/three-wheelers--is seen as lowering global demand for oil: In the STEPS case, oil demand falls about 6 million barrels per day (BBL/d) in 2030 and more than 10 million BBL/d in 2035. In the more aggressive APS case, EVs are seen displacing about 12 million BBL/d of global oil demand.
The report has far less detail about where EVs are being manufactured, though China reportedly has a dominant market share, particularly for lower-cost vehicles.
The Global EV Outlook 2024 report also looked at the stock prices of EV companies--including vehicle and battery manufacturers and companies involved in the extraction or processing of battery metals. The stocks of those companies have "consistently outperformed general stock markets, major traditional carmakers, and other segments of clean technology," the report said.
That's no mean feat given that the S&P 500 index has risen a total of nearly 67% over the prior five years. Some portion of the sharp growth in investor enthusiasm for EV companies' recent stock market returns likely stems from investors seeing EVs as the next big thing.
The IEA report continued: "Return on investment has increased more over the 2019-2023 period for these (EV) companies than it has for others, in relative terms. The combined market capitalization of pure play EV makers boomed from $100 billion in 2020 to $1 trillion at the end of 2023, with a peak over $1.6 trillion at the end of 2021, though this trend was primarily driven by Tesla. The market capitalization (determined by multiplying stock price by the number of shares outstanding) of battery makers and battery metal companies also increased significantly over the same period."
But this overall upward trend glosses over significant volatility, the IEA acknowledged. "Supply-chain disruptions and battery metal price fluctuations--notably in the wake of Russia's invasion of Ukraine--as well as increasing competition, price wars among OEMs (original equipment manufacturers) and expectations of slower relative annual growth as major EV markets mature, and of possible consolidation, are having an important downward impact on investor confidence and EV stocks."
Lower-priced vehicles and a dramatic expansion of the charging infrastructure are two critical determinants of future growth in EV sales, the IEA report said.
Regarding EV batteries, the report said EV battery manufacturers can produce more batteries than are needed, but that gap is expected to close as vehicle sales rise. A good bit of future supply is expected to come from recycling EV batteries. The IEA report noted, "As the EV stock ages, effective end-of-life strategies that encompass recycling and reuse must be put in place to make supply chains circular and to help mitigate critical mineral demand. The battery recycling sector, still nascent in 2023, will be core to the future of EV supply chains, and to maximizing the environmental benefits of batteries."
The main sources of supply for battery recycling plants in 2030 will be EV battery production scrap, accounting for half of supply, and retired EV batteries, accounting for about 20%, noted the Global EV Outlook 2024. Production scrap materials remain in an almost pristine state, and therefore are much easier and cheaper to recycle and feed back into the manufacturing plant. The supply of new and recycled batteries could be significantly greater than demand by 2030, triggering a virtuous cycle where EV prices fall and demand rises.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The IEA report, Global EV Outlook 2024, said that a broader and faster global uptake will require more affordable vehicles and a dramatic expansion of the EV charging network. The report was released on Tuesday.
China continues to be the dominant market for EV sales, reaching about 3 million units in 2021, 6 million in 2022 and 8.1 million in 2023. This year, new EV sales there are expected to approach 10 million units. Europe is projected to remain the second-largest market for new EV sales this year, and the U.S. a distant third.
"The continued momentum behind electric cars is clear in our data, although it is stronger in some markets than others," IEA Executive Director Fatih Birol said in a statement accompanying the report. "Rather than tapering off, the global EV revolution appears to be gearing up for a new phase of growth. The wave of investment in battery manufacturing suggests the EV supply chain is advancing to meet automakers' ambitious plans for expansion. As a result, the share of EVs on the roads is expected to continue to climb rapidly."
"Based on today's policy settings alone," he continued, "almost one in three cars on the roads in China by 2030 is set to be electric, and almost one in five in both the United States and European Union. This shift will have major ramifications for both the auto industry and the energy sector."
"Electric cars continue to make progress towards becoming a mass-market product in a larger number of countries," the IEA report said. "Tight margins, volatile battery metal prices, high inflation, and the phase-out of purchase incentives in some countries have sparked concerns about the industry's pace of growth, but global sales data remain strong."
The same China-Europe-U.S. dominance of sales continued in the first quarter, the IEA report said. First-quarter EV sales rose about 25% over the year-earlier quarter.
If the IEA's predicted record 2024 sales materialize, that "robust growth" would suggest that many major markets will have entered a new phase, "with uptake shifting from early adopters to the mass market."
EVs are getting larger around the world. In 2018, about 75% of the EVs sold worldwide were categorized as "small" or "medium" sized vehicles. But gradually since then, "small" and "medium" vehicles have lost market share to "large" vehicles and sport utility vehicles (SUVs), a trend typified by U.S. and European sales. A growing share of new EV sales in China are deemed to be "large" vehicles and SUVs, mirroring what has happened in Europe and the U.S. and tipping the global scales to those larger models.
The Paris energy agency has used three scenarios to assess the world's progress in limiting greenhouse gas emissions (GHGs). It used those three scenarios to project future sales of non-internal combustion engines, essentially battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs).
The three IEA scenarios are:
- Stated Policies Scenario (STEPS), which reflects existing policies and measures, as well as firm policy ambitions and objectives that have been legislated by governments around the world
- Announced Pledges Scenario (APS), which assumes that all announced ambitions and targets made by governments around the world are met in full and on time. With regards to electromobility, it includes all recent major announcements of electrification targets and longer-term net zero emissions and other pledges, regardless of whether these have been anchored in legislation, and
- Net-Zero Emissions by 2050 Scenario (NZE), which sets out a "narrow but achievable pathway" for the global energy sector to achieve net zero CO2 emissions by 2050.
In the STEPS case, the global stock of EVs across all models, including EVs and PHEVs but excluding two- and three-wheeled vehicles, grows from less than 45 million in 2023 to 250 million in 2030 and 525 million in 2035, an average annual growth rate of about 23%.
The APS case increases average annual sales by 1%, to 24%, with the result being 585 million vehicles operating by 2035. In the NZE case, EV sales grow an average of 27% per year, which would push total global EV stock to about 790 million by 2035. Both of those cases similarly include EVs and PHEVs but exclude two- and three-wheeled vehicles.
The rapid uptake of EVs of all types--cars, vans, trucks, buses and two/three-wheelers--is seen as lowering global demand for oil: In the STEPS case, oil demand falls about 6 million barrels per day (BBL/d) in 2030 and more than 10 million BBL/d in 2035. In the more aggressive APS case, EVs are seen displacing about 12 million BBL/d of global oil demand.
The report has far less detail about where EVs are being manufactured, though China reportedly has a dominant market share, particularly for lower-cost vehicles.
The Global EV Outlook 2024 report also looked at the stock prices of EV companies--including vehicle and battery manufacturers and companies involved in the extraction or processing of battery metals. The stocks of those companies have "consistently outperformed general stock markets, major traditional carmakers, and other segments of clean technology," the report said.
That's no mean feat given that the S&P 500 index has risen a total of nearly 67% over the prior five years. Some portion of the sharp growth in investor enthusiasm for EV companies' recent stock market returns likely stems from investors seeing EVs as the next big thing.
The IEA report continued: "Return on investment has increased more over the 2019-2023 period for these (EV) companies than it has for others, in relative terms. The combined market capitalization of pure play EV makers boomed from $100 billion in 2020 to $1 trillion at the end of 2023, with a peak over $1.6 trillion at the end of 2021, though this trend was primarily driven by Tesla. The market capitalization (determined by multiplying stock price by the number of shares outstanding) of battery makers and battery metal companies also increased significantly over the same period."
But this overall upward trend glosses over significant volatility, the IEA acknowledged. "Supply-chain disruptions and battery metal price fluctuations--notably in the wake of Russia's invasion of Ukraine--as well as increasing competition, price wars among OEMs (original equipment manufacturers) and expectations of slower relative annual growth as major EV markets mature, and of possible consolidation, are having an important downward impact on investor confidence and EV stocks."
Lower-priced vehicles and a dramatic expansion of the charging infrastructure are two critical determinants of future growth in EV sales, the IEA report said.
Regarding EV batteries, the report said EV battery manufacturers can produce more batteries than are needed, but that gap is expected to close as vehicle sales rise. A good bit of future supply is expected to come from recycling EV batteries. The IEA report noted, "As the EV stock ages, effective end-of-life strategies that encompass recycling and reuse must be put in place to make supply chains circular and to help mitigate critical mineral demand. The battery recycling sector, still nascent in 2023, will be core to the future of EV supply chains, and to maximizing the environmental benefits of batteries."
The main sources of supply for battery recycling plants in 2030 will be EV battery production scrap, accounting for half of supply, and retired EV batteries, accounting for about 20%, noted the Global EV Outlook 2024. Production scrap materials remain in an almost pristine state, and therefore are much easier and cheaper to recycle and feed back into the manufacturing plant. The supply of new and recycled batteries could be significantly greater than demand by 2030, triggering a virtuous cycle where EV prices fall and demand rises.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
