Global electric vehicle sales continue to grow strongly., Electric Vehicle News Bitesize
Global electric vehicle sales continue to grow strongly., Electric Vehicle News Bitesize

Global electric vehicle sales will continue to grow strongly in 2022, following last year’s records. How can this growth be maintained? Subscribe to Electric Vehicle News Bitesize Podcast for FREE!

Policy support and the emergence of new models are supporting sales in key markets, but greater efforts are needed to anticipate supply chain bottlenecks and boost production of key minerals.

Electric vehicle sales drove 2021 and have remained strong so far in 2022, but securing future growth will require greater efforts to diversify battery manufacturing and supply of key minerals to mitigate the risk of shortages and higher prices.

According to the latest edition of the annual Global Electric Vehicle Outlook, sales of electric vehicles, including pure electric and plug-in hybrids, doubled in 2021 to a new record of 6.6 million units, surpassing all weekly sales in 2012. Despite the pressure on the global supply chain, sales continued to grow strongly in 2022, with 2 million electric vehicles sold globally in the first quarter, three-quarters more than a year earlier. By the end of 2021, there were about 16.5 million electric vehicles on the road globally, triple the number in 2018.

Electric vehicle sales in China almost tripled to 3.3 million in 2021, accounting for about half of global sales. Sales also rose strongly in Europe (up 65% to 2.3 million) and the US (doubling to 630,000). Electric vehicles in China tend to be smaller than those in other markets. In addition to lowering production costs, this also significantly narrows the price gap with conventional cars. The median price of an Electric Vehicle in China is only 10% higher than that of conventional products, compared with an average of 45% to 50% in other major markets. By contrast, Electric Vehicle sales are lagging in most emerging and developing countries, where models are often scarce and at prices unaffordable for the mass market.

Continued political support is a key reason for strong Electric Vehicle sales in many markets, with total public spending on subsidies and incentives set to double to nearly $30 billion. A growing number of countries have set ambitious vehicle electrification goals over the next few decades, with many automakers planning to electrify their fleets beyond policy goals. In 2021, the number of electric vehicle models worldwide was five times higher than in 2015, and the number of available models reached 450 by the end of 2021.

“Few sectors of the global new energy economy are as dynamic as electric vehicles. The industry’s success in setting new sales records is very encouraging, but there is no reason to be complacent. Policymakers, industry leaders and investors need to be vigilant and resourceful to reduce the risk of supply disruptions and ensure sustainable supplies of critical minerals. As part of its new ministerial mandate, the IEA is working with governments around the world to Research how to strategically manage critical mineral resources needed for electric vehicles and other key clean energy technologies.

In the near term, the main hurdles to continued strong electric vehicle sales are higher prices for some key minerals vital to battery manufacturing, as well as supply chain disruptions caused by Russia’s attack on Ukraine and the ongoing Covid-19 lockdown in parts of China. In the longer term, greater efforts will need to be made to build sufficient charging infrastructure to meet the expected growth in electric vehicle sales.

Lithium, an important mineral for car batteries, is more than seven times more expensive in May 2022 than it was at the beginning of 2021, while cobalt and nickel prices have also risen. All other things being equal, if these prices remain at current levels, battery pack costs could increase by 15%, reversing a several-year downward trend. Russia’s invasion of Ukraine has added pressure as Russia supplies 20 percent of the world’s battery-grade nickel.

With more than half of the processing and refining capacity of lithium, cobalt and graphite located in China, both European and US governments are pushing for industrial policies aimed at developing electric vehicle supply chains domestically. In addition, China produces three-quarters of lithium-ion batteries and has 70% of the cathode and 85% of the anode capacity, both of which are important components of batteries. With more than half of all electric vehicles assembled in China in 2021, the country is poised to cement its manufacturing dominance.

In 2021, nearly 10 percent of all cars sold globally were EVs, compared with just 0.3 percent of global truck sales. In a scenario consistent with the climate commitments and targets announced so far by countries around the world, this would need to increase to around 10% by 2030 – by 2030 in the IEA’s 2050 net-zero emissions scenario. Thanks to strong state support, electric trucks have so far been largely used only in China. But other countries have also announced plans to electrify heavy-duty trucks, and manufacturers are expanding their model choices. Long-haul trucks requiring high-power charging, are currently expensive, and often require grid upgrades. More government support and planning for public charging infrastructure is needed.

Other proposals include using stringent vehicle efficiency and carbon emission standards to underpin demand for electric vehicles; prioritizing two-wheel, three-wheel and city buses to promote electric vehicles in emerging and developing markets; encouraging more investment in key Minerals while respecting environmentally and socially responsible practices to ensure adequate supplies for the clean energy transition.

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Global electric vehicle sales continue to grow strongly., Electric Vehicle News Bitesize
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