The global auto industry had a punishing year in 2020 due to pandemic lockdowns, but the electric car market bucked the wider trend with growth of over 40% and is on track for a decade of strong expansion, according to a new report published Thursday by the International Energy Agency (IEA).
The IEA’s Global Electric Vehicle Outlook 2021 finds that despite the pandemic setting off a cascade of economic recessions, a record 3 million new electric cars were registered in 2020, a 41% increase from the previous year.
By comparison, IEA reports, the global automobile market contracted 16% in 2020. Electric cars’ strong momentum has continued into this year, with sales in the first quarter of 2021 reaching nearly two and half times their level in the same period a year earlier.
Near term outlook shines
The near-term outlook for EV sales is bright, says IEA. In the first quarter of 2021, global electric car sales rose by around 140% compared to the same period in 2020, driven by sales in China of around 500,000 vehicles and in Europe of around 450 000. US sales more than doubled relative to the first quarter of 2020, albeit from a much lower base.
Last year’s increase brought the number of electric cars on the world’s roads to more than 10 million, with another roughly 1 million electric vans, heavy trucks and buses.
Vehicle manufacturers announced increasingly ambitious electrification plans, IEA reports. Out of the world’s top 20 vehicle manufacturers, which represented around 90% of new car registrations in 2020, 18 have stated plans to widen their portfolio of models and to rapidly scale up the production of light-duty electric vehicles. The model availability of electric heavy-duty vehicles is also broadening, with four major truck manufacturers indicating an all-electric future.
For the first time last year, IEA found, Europe overtook China as the centre of the global electric car market. Electric car registrations in Europe more than doubled to 1.4 million, while in China they increased 9% to 1.2 million.
Electric vehicles are set for significant growth over the coming decade, IEA reports. Based on current trends and policies, it projects the number of electric cars, vans, heavy trucks and buses on the road worldwide to reach 145 million by 2030. But the global fleet could reach 230 million if governments accelerate efforts to reach international climate and energy goals.
If governments around the world pull together to pursue the even more ambitious goal of reaching net-zero emissions globally by 2050, IEA says, the global electric vehicle fleet would grow even bigger.
Governments across the world spent $14 billion on direct purchase incentives and tax deductions for electric cars in 2020, a 25% rise year-on-year. Despite this, the share of government incentives in total spending on EVs has been on a downward slide from roughly 20% in 2015 to 10% in 2020.
All the increase in government spending was in Europe, where many countries responded to the pandemic-induced economic downturn with incentive schemes that boosted electric car sales. In China, government spending decreased as the eligibility requirements for incentive programs tightened.
Worldwide about 370 electric car models were available in 2020, a 40% increase from 2019. China has the widest offering, reflecting its less consolidated automotive sector and that it is the world’s largest EV market. But in 2020 the biggest increase in number of models was in Europe — where it more than doubled.
Automakers offered 370 electric car models in 2020, a 40% year-on-year increase. Eighteen of the 20 largest automakers have announced intentions to further increase the number of available models and boost production of electric light-duty vehicles. These automakers account for 90% of all global auto sales.
The Global Electric Vehicle Outlook 2021 notes that governments helped buffer electric cars from 2020’s downturn by extending existing policy and fiscal support, and augment them with stimulus measures in response to the covid-19 crisis. Leading countries also promoted the competitive position of electric vehicles by strengthening fuel economy and emissions standards, and redoubled their support for developing battery technology and deploying charging station infrastructure.
More details on the implications of this pathway for electric vehicles and the broader transport sector will appear in the IEA’s special report, Net Zero in 2050: A roadmap for the global energy system, which will be released in May.