Executive summary – Global EV Outlook 2022 – Analysis - IEA

The increase in EV sales in 2021 was primarily led by the People's Republic of China (“China”), which accounted for half of the growth. More vehicles were sold ... IEA CloseSearch Submit Email* Error Password* Forgotpassword? Error CheckboxRememberme SigninSignin Createanaccount CreateafreeIEAaccounttodownloadourreportsorsubcribetoapaidservice. JoinforfreeJoinforfree logo OpenNavigation Contents Cite Share Downloadfullreport arrow-down arrow-down-24 Executivesummary Recommendations ElectricVehiclesInitiative Trendsinelectriclight-dutyvehicles Trendsinelectricheavy-dutyvehicles FinancialperformanceofEV-relatedcompanystocks Trendsincharginginfrastructure Citereport Closedialog IEA(2022),GlobalEVOutlook2022,IEA,Parishttps://www.iea.org/reports/global-ev-outlook-2022 Copytoclipboard Sharethisreport Closedialog ShareonTwitterTwitter ShareonFacebookFacebook ShareonLinkedInLinkedIn ShareonEmailEmail ShareonPrintPrint Reportoptions Closedialog Download Fewareasintheworldofcleanenergyareasdynamicastheelectriccarmarket.Salesofelectricvehicles(EVs)doubledin2021fromthepreviousyeartoanewrecordof6.6million.Backin2012,just120 000electriccarsweresoldworldwide.In2021,morethanthatmanyaresoldeachweek.Nearly10%ofglobalcarsaleswereelectricin2021,fourtimesthemarketsharein2019.Thisbroughtthetotalnumberofelectriccarsontheworld’sroadstoabout16.5 million,tripletheamountin2018.Globalsalesofelectriccarshavekeptrisingstronglyin2022,with2 millionsoldinthefirstquarter,up75%fromthesameperiodin2021.ThesuccessofEVsisbeingdrivenbymultiplefactors.Sustainedpolicysupportisthemainpillar.PublicspendingonsubsidiesandincentivesforEVsnearlydoubledin2021tonearlyUSD 30 billion.Agrowingnumberofcountrieshavepledgedtophaseoutinternalcombutionenginesorhaveambitiousvehicleelectrificationtargetsforthecomingdecades.Meanwhile,manycarmakershaveplanstoelectrifytheirfleetsthatgofurtherthanpolicytargets.Finally,fivetimesmorenewEVmodelswereavailablein2021thanin2015,increasingtheattractivenessforconsumers.ThenumberofEVmodelsavailableonthemarketisaround450.TheincreaseinEVsalesin2021wasprimarilyledbythePeople’sRepublicofChina(“China”),whichaccountedforhalfofthegrowth.MorevehiclesweresoldinChinain2021(3.3 million)thanintheentireworldin2020.SalesinEuropeshowedcontinuedrobustgrowth(up65%to2.3 million)afterthe2020boom,andtheyincreasedintheUnitedStatesaswell(to630 000)aftertwoyearsofdecline.Thefirstquarterof2022showedsimilartrends,withsalesinChinamorethandoublingcomparedwiththefirstquarterof2021(accountingformostofglobalgrowth),a60%increaseintheUnitedStatesanda25%increaseinEurope.InChina,electriccarsaretypicallysmallerthaninothermarkets.This,alongsidelowerdevelopmentandmanufacturingcosts,hascontributedtodecreasingthepricegapwithconventionalcars.In2021,thesales-weightedmedianpriceofEVsinChinawasonly10%morethanthatofconventionalofferings,comparedwith45-50%onaverageinothermajormarkets.Chinaaccountsfor95%ofnewregistrationsofelectrictwo-andthree-wheelervehiclesand90%ofnewelectricbusandtruckregistrationsworldwide.Electrictwo-andthree-wheelervehiclesnowaccountforhalfofChina’ssales.Thespeedofcharginginfrastructureroll-outinChinaisfasterthaninmostotherregions.Bycontrast,EVsalesarestilllagginginotheremerginganddevelopingeconomies,wherethefewmodelsthatareavailableremainunaffordableformass-marketconsumers.InBrazil,IndiaandIndonesia,fewerthan0.5%ofcarsalesareelectric.However,EVsalesdoubledinanumberofregionsin2021–includinginIndia–whichcouldpavethewayforquickermarketuptakeby2030ifsupportinginvestmentsandpoliciesareinplace. Electriccarsalescontinuetobreakrecords,butmineralsupplyconstraintsarelooming TheCovid-19pandemicandRussia’swarinUkrainehavedisruptedglobalsupplychains,andthecarindustryhasbeenheavilyimpacted.Inthenearfuture,EVdeliverydelaystocustomersmaydampensalesgrowthinsomemarkets.Butinthelongerterm,governmentandcorporateeffortstoelectrifytransportareprovidingasolidbasisforfurthergrowthinEVsales.TheIEAAnnouncedPledgesScenario(APS),whichisbasedonexistingclimate-focusedpolicypledgesandannouncements,presumesthatEVsrepresentmorethan30%ofvehiclessoldgloballyin2030acrossallmodes(excludingtwo-andthree-wheelers).Whileimpressive,thisisstillwellshortofthe60%shareneededby2030toalignwithatrajectorythatwouldreachnetzeroCO2emissionsby2050.UndercurrentpolicyplansreflectedintheIEAStatedPoliciesScenario(STEPS),EVsreachjustover20%ofsalesin2030,increasingthestock11-foldfromtoday’slevelsto200millionvehicles.TheglobalmarketvalueofelectricityforEVchargingisprojectedtogrowover20-foldintheAPS,reachingapproximatelyUSD 190 billionby2030,whichisisequivalenttoaboutone-tenthoftoday’sdieselandgasolinemarketvalue.Yet,theamountofpubliccharginginfrastructurethathasbeenannouncedmightbeinsufficienttopowerthesizeoftheEVmarketbeingtargeted.Thereareimportantvariationsacrosscountriesintermsofcharginginfrastructureroll-outspeedandneed.ThesuitablenumberofchargersperEVwilldependonlocalspecificitiessuchashousingstock,typicaltraveldistances,populationdensityandrelianceonhomecharging.Chargingathomeandworkplacearelikelytosupplymuchofthedemandoverall,butthenumberofpublicchargersstillneedstoexpandninefoldandreachover15 millionunitsin2030tomeetthelevelsenvisagedintheAPSandprovideconsumerswithadequateandconvenientcoverage.ElectrictruckshavesofarbeensubstantiallydeployedonlyinChina,thankstostronggovernmentsupport.In2021,however,severalothercountriesannouncedsupportforheavytruckelectrification.Truckmanufacturershavealsodevelopednewelectrictruckmodels:morethan170wereavailableoutsideChinain2021.Rapiddeploymentwillbeneededtokeeppacewithgovernmentannouncements,andfurthereffortswillbeneededtomeetnetzeroambitions.Theelectrictrucksaccountedforjust0.3%ofglobaltrucksalesin2021.Thisneedstoreacharound10%by2030intheAPS,and25%intheIEA’sNetZeroEmissionsby2050Scenario(NZE).Short-haultrucksarethesegmentthatcanbeelectrifiedfastest,andforthemostpartthesedonotneedawidechargingnetworkifdepotchargingisavailable.Longer-rangetruckswillrequirehigh-powerchargersthatarecurrentlyexpensiveandoftenrequiresignificantgridupgrades.Asaresult,earlyplanningandinvestmentsarecrucialtominimisethestrainonthegridandprovideasuitablenetworkforthenextstageofheavy-dutyvehicleelectrification.Thesimultaneouselectrificationofroadtransportandthedeploymentofdecentralisedvariablerenewablessuchasrooftopsolarwillmakepowergriddistributionmorecomplextomanage.Gridsimulationssuggestthatbetweennowand2030,EVloadsinmajorcarmarketsshouldnotposesignificantchallenges.ThisisbecauseEVsarelikelytoaccountforlessthan20%oftheoverallvehiclestockinmostcountries.However,someearlyadoptercitiescouldfacegridcongestionpressuresbetweennowand2030.DigitalgridtechnologiesandsmartchargingholdthekeytotransformingEVsfromagridintegrationchallengetoanopportunityforgridmanagement. Saleskeeprising,butmuchmoreneedstobedonetosupportcharginginfrastructureandheavy-dutyvehicles Electrifyingtransporthasmultiplebenefits.Russia’sinvasionofUkrainehasbroughttheroleofEVsinreducingoildemandtothefore;itisoneofthe10measuresproposedbytheIEAtocutoiluseinthenearterm.EVdeploymentinlinewiththepledgesandannouncementsintheAPSsuggestsadisplacement(excludingtwoandthreewheelers)of1.6 million barrels per day (mb/d)ofoilby2025,and4.6 mb/dby2030.Intermsofclimatechange,EVsachievenetgreenhousegasemissionsreductionofnearly580MtCO2-eqintheAPSonawell-to-wheelbasiscomparedtoanequivalentuseofICEvehicles–morethanCanada’senergy-relatedCO2emissionstoday.Electrifyingtransportnaturallyboostselectricitydemand:intheAPS,EVsareprojectedtoaccountforabout4%oftotalfinalelectricitydemandby2030.At1 100 terawatt-hours(TWh),electricitydemandfromEVsgloballyin2030intheAPSisequivalenttotwicetoday’stotalelectricityuseinBrazil.  Electrifyingtransporthelpsaddressairpollution,oilimportdependencyandclimatechange TherapidincreaseinEVsalesduringthepandemichastestedtheresilienceofbatterysupplychains,andRussia’swarinUkrainehasfurtherexacerbatedthechallenge.Pricesofrawmaterialssuchascobalt,lithiumandnickelhavesurged.InMay2022,lithiumpriceswereoverseventimeshigherthanatthestartof2021.Unprecedentedbatterydemandandalackofstructuralinvestmentinnewsupplycapacityarekeyfactors.Russia’sinvasionofUkrainehascreatedfurtherpressures,sinceRussiasupplies20%ofglobalhigh-puritynickel.Averagebatterypricesfellby6%toUSD 132perkilowatt-hourin2021,aslowerdeclinethanthe13%dropthepreviousyear.Ifmetalpricesin2022remainashighasinthefirstquarter,batterypackswouldbecome15%moreexpensivethantheywerein2021,allelsebeingequal.However,giventhecurrentoilpriceenvironmenttherelativecompetitivenessofEVsremainsunaffected.Today’sbatterysupplychainsareconcentratedaroundChina,whichproducesthree-quartersofalllithium-ionbatteriesandishometo70%ofproductioncapacityforcathodesand85%ofproductioncapacityforanodes(botharekeycomponentsofbatteries).Overhalfoflithium,cobaltandgraphiteprocessingandrefiningcapacityislocatedinChina.Europeisresponsibleforoverone-quarterofglobalEVproduction,butitishometoverylittleofthesupplychainapartfromcobaltprocessingat20%.TheUnitedStateshasanevensmallerroleintheglobalEVbatterysupplychain,withonly10%ofEVproductionand7%ofbatteryproductioncapacity.BothKoreaandJapanhaveconsiderablesharesofthesupplychaindownstreamofrawmaterialprocessing,particularlyinthehighlytechnicalcathodeandanodematerialproduction,Koreaisresponsiblefor15%ofcathodematerialproductioncapacity,whileJapanaccountsfor14%ofcathodeand11%ofanodematerialproduction.KoreanandJapanesecompaniesarealsoinvolvedintheproductionofotherbatterycomponentssuchasseparators.Mininggenerallytakesplaceinresource-richcountriessuchasAustralia,ChileandtheDemocraticRepublicofCongo,andishandledbyafewmajorcompanies.GovernmentsinEuropeandtheUnitedStateshaveboldpublicsectorinitiativestodevelopdomesticbatterysupplychains,butthemajorityofthesupplychainislikelytoremainChinesethrough2030.Forexample,70%ofbatteryproductioncapacityannouncedfortheperiodto2030isinChina.Pressureonthesupplyofcriticalmaterialswillcontinuetomountasroadtransportelectrificationexpandstomeetnetzeroambitions.Additionalinvestmentsareneededintheshortterm,particularlyinmining,whereleadtimesaremuchlongerthanforotherpartsofthesupplychain.Projectedmineralsupplyuntiltheendofthe2020sisinlinewiththedemandforEVbatteriesintheSTEPS.Butthesupplyofsomemineralssuchaslithiumwouldneedtorisebyuptoone-thirdby2030tomatchthedemandforEVbatteriestosatisfythepledgesandannouncementsintheAPS.Forexample,demandforlithium–thecommoditywiththelargestprojecteddemand-supplygap–isprojectedtoincreasesixfoldto500 kilotonnesby2030intheAPS,requiringtheequivalentof50newaverage-sizedmines.Thereareothervariablesaffectingdemandforminerals.Ifcurrenthighcommoditypricesendure,cathodechemistriescouldshifttowardslessmineral-intensiveoptions.Forexample,thelithiumironphosphatechemistrydoesnotrequirenickelnorcobalt,butcomeswithalowerenergydensityandisthereforebettersuitedforshorter-rangevehicles.TheirshareofglobalEVbatterysupplyhasmorethandoubledsince2020becauseofhighmineralpricesandtechnologyinnovation,primarilydrivenbyanincreasinguptakeinChina.Innovationinnewchemistries,suchasmanganese-richcathodesorevensodium-ion,couldfurtherreducethepressureonmining.Recyclingcanalsoreducedemandforminerals.Althoughtheimpactbetweennowand2030islikelytobesmall,recycling’scontributiontomoderatingmineraldemandiscriticalafter2030.IntheNZEScenario,demandgrowsevenfaster,requiringadditionaldemand-sidemeasuresandtechnologyinnovation.Today’scorporateandconsumerpreferrenceforlargecarmodelssuchassportsutilityvehicles(SUVs),whichaccountforhalfofallelectricmodelsavailablegloballyandrequirelargerbatteriestotravelthesamedistances,isexertingadditionalpressure. Focusisoncriticalmineralsasbatterymarketsexpand 1–MaintainandadaptsupportforelectriccarsAstheelectriccarmarketmatures,relianceondirectsubsidiesmustdecreaseandeventuallyfadeout.Budget-neutralfeebateprogrammes–whichtaxinefficientinternalcombustionenginevehiclestofinancesubsidiesforlowemissionsorEVspurchases–canbeausefultransitionpolicytool.Stringentvehicleefficiencyand/orCO2standardshavepromotedEVadoptioninmostleadingEVmarketsandshouldbeadoptedbyallcountriesseekingtohastenthetransitiontoelectromobility.2-Kickstarttheheavy-dutymarketMoreheavy-dutyelectricmodelsareavailable,andelectricbusesandtrucksarebecomingcompetitiveonatotal-cost-of-ownershipbasisacrossmoreandmoreapplications.Policy-leddeploymentcanhelpkickstartthissector.Zeroemissionvehiclesalesmandates,purchaseincentivesandCO2standardscanallhelpspeedupthetransition.3-PromoteadoptioninemerginganddevelopingeconomiesElectrificationofroadtransportinemerginganddevelopingeconomiesshouldprioritisetwo/three-wheelersandurbanbuses,asthesevehicletypesaremostcostcompetitive.Pricesignalsand charginginfrastructureavailabilitycanalsohelptheeconomiccaseforelectrification.4-ExpandEVinfrastructureandsmartgridsGovernmentsshouldcontinuetosupportdeploymentofpubliclyavailablecharginginfrastructureatleastuntilthereareenoughEVsontheroadforanoperatortosustainachargingnetwork.Continuedgovernmentsupport,eitherthroughregulationsrequiringthebuildingoutofchargingstationsorthroughfiscalpoliciesandsupport,shouldensureequitableaccesstochargingforallcommunitiestoensurethatnobodyisleftbehindinthetransition.Incentivisingandfacilitatingtheinstallationofhomechargersinexistingparkingspacesisimportant.MandatingEVchargingreadinessfornewbuildingscanhelp.Atthesametime,localauthoritiesshouldsupporttheinstallationofchargersinexistingbuildings.Co-ordinatedplansongridexpansionandenhancements,includingdigitaltechnologiestofacilitatetwo-waycommunicationandpricingbetweenEVsandgrids,areneedednowtoensurethatEVscanbecomearesourceforgridstabilityratherthanachallenge. 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