Sales of electric vehicles are motoring along according to a report from the world's leading energy authority that predicts one in five cars sold this year could be electric.
In a report that brushes aside claims of a slowdown in the industry, the International Energy Agency forecast that EV sales would surge in 2024 on the back of falling prices.
The IEA, a club of rich-country energy users, noted that EV sales were already up 25 per cent so far this year compared with the same period in 2023.
And it estimated that sales would reach about 17 million by the end of the year compared with 14 million for the 12 months to the end of December.
But the IEA also noted that China continued to dominate the EV market, both in terms of exports and domestic sales.
Of all the electric cars forecast to be sold in 2024, the agency said about 10 million would be in China – giving the industry a 45 per cent share of the market in the Middle Kingdom.
By comparison, the IEA said the share of new car sales that were forecast to be electric in Europe and the US was 25 per cent and 11 per cent, respectively.
No projections were available for Australia, but figures from the Federal Chamber of Automotive Industries showed 7.2 per cent of new vehicles delivered to buyers in 2023 were electric.
This compared with 3.1 per cent in 2022.
Pump the brakes or hit the pedal?
Fatih Birol, the executive director of the IEA, said the report's findings ran counter to the perception that EV sales were slowing down as consumers stuck with petrol-powered options.
Automakers including industry leader Tesla and giant incumbents Ford and General Motors have all pumped the brakes on expanding EV production amid slower than expected rates of demand growth.
But Dr Birol said the world's fleet of EVs was growing strongly and the projections, at least from the IEA's point of view, were clear.
"The continued momentum behind electric cars is clear in our data, although it is stronger in some markets than others," Dr Birol said.
"Rather than tapering off, the global EV revolution appears to be gearing up for a new phase of growth."
According to the IEA, the growth in EV sales needed to be seen against the backdrop of a bigger electric fleet in the first place.
It said global sales of electric vehicles amounted to 18 per cent of all cars sold in 2023, up from 14 per cent in 2022 and seemingly on a one-way path.
This, the IEA wrote, suggested that demand for EVs was shifting from early adopters to the mass market, which it argued was a major turning point for the industry.
Driving that shift was falling prices that were being pushed lower by intense competition among car makers across the United States, Europe and, increasingly, China.
The agency said the flurry of activity from automakers – 20 major manufacturers representing more than 90 per cent of global car sales in 2023 have set electrification targets – would have lagged effects.
Decarbonising transport vital: IEA
Among these was a big expansion in the supply chains needed to produce batteries – from mining to mineral processing and high-end manufacturing.
"The wave of investment in battery manufacturing suggests the EV supply chain is advancing to meet automakers' ambitious plans for expansion," Dr Birol said.
"As a result, the share of EVs on the roads is expected to continue to climb rapidly.
"Based on today's policy settings alone, 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."
Dr Birol noted there were concerns about the state of the EV market given the eroding profits of car makers, the volatility of battery metal prices, high inflation and the phasing out of subsidies in some countries.
Tesla, for example, was bracing for its worst result in seven years thanks to a brutal price war and falling sales in some markets.
But Dr Birol argued the broader industry was more resilient than some people recognised.
What's more, he said it was imperative the electrification of the transport fleet carry on at pace given the industry's emissions.
The transport sector as a whole is responsible for about a quarter of the world's annual emissions and the IEA said cleaning it up was a pressing task.
It said current policy settings around the world – and the uptake of electric cars, vans, trucks, buses and two- and three-wheelers they would enable – "is projected to avoid the need for more than 10 million barrels of oil per day in 2035".
"That's equivalent to all the oil demand from road transport in the United States today," the agency wrote.
