Electric Vehicles may form 18% of New Purchases this year, as Gov’ts eye end of Internal Combustion Engine

Ann Arbor (Informed Comment) – The annual report by the International Energy Agency on electric vehicles is just out, and it confirms the global rush to electrify transportation.

Globally, some 14% of new cars registered in 2022 were electric. That comes to 10 million electric cars sold, while in the entire European Union only 10 million new cars of all kinds were bought. That 14% is nearly triple the percentage as recently as 2020. The averages were pulled up by some countries, like Germany, where that share was more like a third. In Europe as a whole, 20% of new car sales were electric. China is also a leader in this sector, with 29% of new cars registered there in 2022 having been electric. In the US, 8% of new car sales in 2022 were electric.

All in all, 26 million electric vehicles were on the road last year, an increase of 60% over 2021. Over half of these cars were on the road in China.

The IAE projects that sales will be way up again in 2023, so that as much as 18% of new car registrations this year will be electric.

There is also progress in Asia. In India, Thailand and Indonesia, EV sales were up 300%, though admittedly they started from a low base.

The IEA concludes that sufficient new battery manufacturing ability is being built out to permit countries to meet their 2050 goals for EV adoption. By that year most countries want to be carbon neutral.

Some 25% of Americans expect their new vehicle to be electric.

President Joe Biden’s Inflation Reduction Act, which is actually a green energy law, is having a significant effect. The IAE says,

“major EV and battery makers announced cumulative post-IRA investments of USD 52 billion in North American EV supply chains, of which 50% is for battery manufacturing, and about 20% each for battery components and EV manufacturing. Overall, company announcements including tentative commitments for US investments for future battery and EV production add up to around USD 75-108 billion.”

To reiterate, $75-108 billion in commitments for battery and electric vehicle manufacturing have already been made.