Electric cars see record-breaking leap in demand

EVs are bringing ‘historic transformation’ to car industry, with sales set to grow 35 per cent in 2023

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Roughly one in every five cars sold around the world will be electric in 2023 following a record-breaking surge in demand, according to a new report.

The International Energy Agency (IEA) revealed on Wednesday that electric vehicle sales topped 10 million globally for the first time last year, with that figure expected to grow by another 35 per cent this year.

The IEA’s annual Global Electric Vehicle Outlook said the rapid increase in electrification was mainly being driven by China, Europe and the United States thanks to ambitious policy programmes.

China alone accounted for 60 per cent of electric vehicle sales in 2022, with half of all EVs in the world now there.

“Electric vehicles are one of the driving forces in the new global economy that is rapidly emerging - and they are bringing about a historic transformation of the car manufacturing industry worldwide,” said IEA Executive Director Faith Birol.

“The trends we are witnessing have significant implications for global oil demand. The internal combustion engine has gone unrivalled for over a century, but electric vehicles are changing the status quo... Cars are just the first wave: electric buses and trucks will follow soon.”

IEA estimates suggest the growth in electric car ownership will avoid the need for at least 5 million barrels a day of oil.

The increased demand is forecast to continue as the costs of electric cars fall in comparison to fuel-consuming vehicles.

“Our current expectation is that we can see price parity in small and medium-sized electric cars in North America and European markets somewhere in the mid-2020s,” said Timar Guell, head of the IEA’s energy technology policy.

“For larger cars like SUVs and pickups, purchasing parity is likely to come later, probably into the 2030s.”

Other advances like ultra fast charging times, increased battery density and improved performance is also expected to drive adoption over the next few years.