This year, global sales of electric vehicles are expected to set new records, bringing their proportion of the auto market to over one-fifth and leading a dramatic revolution of the auto industry with repercussions for the energy sector, particularly oil.
Sales of electric vehicles are predicted to increase by 35% this year, reaching a total of 14 million units sold by the end of the year, according to the latest edition of the International Energy Agency’s (IEA) annual Global Electric Vehicle Outlook.
The IEA predicts that the market share of electric cars will climb to 18% this year from just 4% in 2020. This is an incredible gain from the 4% of the market that electric cars held in 2020.
According to IEA executive director Fatih Birol: ‘’electric vehicles are one of the driving forces in the new global energy economy that is rapidly emerging,’’ and they are ushering in a ‘’historic transformation’’ of the auto manufacturing sector throughout the world.
The current trends might have far-reaching effects on oil consumption throughout the world. Electric cars are challenging the dominance of the internal combustion engine, which has been the standard for over a century.
At least 5 million barrels of oil per day are expected to be saved by 2030. Electric vehicles are taking over, and cars are only the beginning.
So far, the largest markets for electric vehicle sales have been in China, Europe, and the United States. In 2022, China will account for 60% of worldwide sales of electric vehicles.
Currently, China is home to more than half of the world's electric vehicle fleet. Sales in the United States and Europe, the second and third largest regions, respectively, increased by 15% and 55% in 2022.
This decade and beyond, the market share of electric cars is likely to expand due to ambitious legislative initiatives in key economies like the Fit for 55 package in the European Union and the Inflation Reduction Act in the United States.
The proportion of electric vehicles sold is expected to increase to almost 60% by 2030 in China, the European Union, and the United States.
According to the IEA's Net Zero Emissions by 2050 Scenario, the demand for electric cars will be met until 2030 by the stated battery production projects.
China continues to dominate the battery and component trade, and its proportion of global electric vehicle exports grew to more than 35% in 2017; nevertheless, production remains highly concentrated.
In order to remain competitive in the EV industry in the years to come, several economies have declared initiatives to support local industries. Nearly 90% of yearly battery demand is to be satisfied by domestic battery makers, according to the EU's Net Zero Industry Act.
Despite starting from a low vantage point, sales of electric vehicles increased by more than three times in India and Indonesia in 2018 and by more than twice that amount in Thailand.
In Thailand, the percentage of electric vehicles sold increased to 3%, while in India and Indonesia, it increased to 1.5%.
These percentages are expected to rise as a result of successful policy and private sector investment. The Indian government's $3.2 billion incentive plan has already attracted investments totalling $8.3 billion, which should lead to a dramatic increase in battery production and EV distribution in the country over the next few years.
South Africa’s transport sector holds the title of being the second biggest polluter after Eskom, with road transport accounting for 91.2% of these transport emissions. To top that off, we only have around 2300 electric vehicles on our roads out of a total of 12 million.
With South Africa exporting three of every four vehicles it manufactures to the EU and UK, who both placed a ban on new internal combustion vehicles by 2030, the country to set to lose massive market share to countries like China when the ban comes into effect.
IOL Environment