The global sales of electric vehicles over the past decade have been growing at a significant rate, most apparently in the last two years when electric vehicle sales more than doubled from three million units in 2020 to 6.6 million units in 2021, according to a report by the International Energy Agency.
This represents an EV share of almost 9% of the global passenger vehicle market in 2021, and nearly tripling its market share from two years prior. The significant growth in volume for the electric vehicle segment in the past three years is notable for taking place during the pandemic, as automotive manufacturers struggled with bottlenecks on their supply chains according to the report by the IEA.
Electric vehicle sales have also been found to be stronger in the later part of the year, as volumes in December in the top three markets were found to be more than 2.5 times the volumes in January, it said. Throughout 2021, monthly sales of electric vehicles have been “consistently at least 50% higher” than the corresponding month in 2020, the IEA report wrote.
Around 16 million electric vehicles are now estimated to be on the roads globally, collectively consuming around 30 terawatt-hours (TWh) of electricity annually, or the same as all electricity generated in Ireland, according to the IEA.
China led global markets in terms of EV volume growth by a large margin, recording 3.4 million sales in 2021, or more than the volume sold around the world in 2020, according to the IEA. This annual increase is the fastest EV market gain in China since 2015, and also outpaced the more gradual recovery of the overall passenger vehicle sales market, the IEA wrote.
In 2021, electric vehicles comprised of 20% market share in China in December, increasing from 7.2% in January that year. The official sales target set by the government of China is for electric vehicles to reach a market share of 20% across the full year in 2025, and the sales performance of EVs in the country suggests that the segment is on track to achieving its target, the IEA noted.
The report atttributed the gains in the Chinese market to several factors, namely the extension to government subsidies in China for another two years about the outbreak of the pandemic. The gains continued despite the winding back of subsidies with a 10% reduction in 2021 and 30% for 2022, and EV market growth last year despite the reduced subsidies suggests that the EV market in China may be maturing, the IEA said.
On the other hand, the strong sales performance in China’s EV segment could also reflect overheated demand by customers rushing to secure subsidies offered in 2021 before its reduction this year, said the report, while another factor is the growing range of small cars made available on the Chinese market. The very compact Wuling Hongguang Mini EV was among China’s bestsellers last year, despite not being eligible for EV subsidies, the report noted.
Meanwhile in Europe, the sales of EVs grew to 2.3 million units, or a gain of almost 70%, with around half of that figure comprised of plug-in hybrids. Overall, the European automotive market has yet to recover from the effects of pandemic, with overall vehicle sales in 2021 being 15% lower than that achieved in 2019, according to the IEA.
The IEA said that increases in EV sales in Europe was partly led by new CO2 emissions standards on the continent, and the gains were also attributed to EV purchase subsidies that have been increased and expanded in most major European markets. Monthly sales of EVs in Europe last year was strongest in the final quarter, the peak arriving in December when EV sales outperformed diesel vehicle sales for the first time, with EVs taking a 21% share in Europe.
In terms of markets by country, Germany was the largest in Europe for electric cars, the continent where “more than one in three” new vehicles sold in November and December were EVs. These accounted for 17% of total European sales in 2021, however there were significant differences between countries; EVs comprised 72% of sales in Norway, 45% in Sweden and 30% in the Netherlands.
Among “large European markets”, Germany had the largest EV share with 25%, followed by the United Kingdom and France, both with 15%, Italy with 8.8% and Spain with 6.5%.
As the overall United States car market recovered, so did its EV segment, which more than doubled its tally from 2020 to surpass 500,000 units sold in 2021, according to the IEA. Tesla remains the largest player in the EV field in the United States, which continues to account for more than half of all electric vehicles sold in the market.
Tesla however has also sustained a drop in market share, which is down from the 65% it held in 2020 as other automakers offered a growing range of new electric vehicles to the market.
The sales of electric vehicles in these major markets – China, Europe and the United States – are not growing at the same pace as other markets globally, as while the aforementioned markets account for around two-thirds of the overall car market and 90% of EV sales, most other markets see electric vehicles account for less than 2%.
Large developing economies such as Brazil, India and Indonesia see an EV penetration of under 1% “without any significant increase” over the past year, the IEA report wrote. These countries see growth in the electric scooter and electric bus segments, however the price premium for electric cars as well as the lack of a charging infrastructure are cited as key reasons for the sluggish uptake.
Other developed economies in Asia show varied levels of EV uptake in their respective markets; Japan has seen the EV market share remain below 1% over the past three years, however Korea has seen EV sales more than double in 2021 after two years of stagnation, with electrification gaining market share to 8%. Meanwhile, Australia started from a low baseline, but more than tripled the EV share to 2% in 2021.
There is plenty of room for growth in the EV segment, however the supply chain for the automotive industry presents challenges not just for the electric vehicle segment, but for the automotive industry at large, the IEA said in its report. In 2021, the price of steel grew by 100%, aluminium by 70% and copper by more than 70%, which affects the production of both conventional ICE and electric vehicles, it continued.
The challenges for electric vehicles are compounded by price hikes for materials required in the manufacture of batteries, such as lithium carbonate which has gained 150% in price year-on-year, graphite by 15%, nickel by 25%, and more, the report added.
In a separate IEA report on the role of critical minerals in clean energy transitions, global markets potentially face a shortage of lithium and cobalt as soon as 2025 – just three years away – unless enough investments are made in order to expand production. This will require the speeding up of not just the extraction of minerals, but also of the entire EV value chain, this report said.
In terms of commitments from automakers toward their development and market growth of electric vehicles, long-time proponent of hybrid electrification Toyota announced last December that it will roll out 30 battery-electric vehicles by 2030 alongside carbon-reducing and carbon neutrality efforts, while Volkswagen has pledged to phase out the sale of ICE-powered vehicles by 2035.
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