According to the International Energy Agency’s (IEA) annual outlook on electric vehicles (EVs), nearly one in five cars sold globally this year will be electric. The IEA predicts that the prices of smaller EV models will drop to rival those of combustion engine cars in North America and Europe by the mid-2020s, as electric car sales globally are expected to surge 35 percent this year to 14 million.
The IEA raised its EV sales forecasts, citing the US Inflation Reduction Act that supports the green industry and subsidises consumers’ purchase of electric vehicles (EVs), as well as China, which makes up half of the EVs on the road worldwide, including battery-electric cars and plug-in hybrids.
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Furthermore, the report stated that the country has seen prices for some smaller EV models edging lower towards those of their combustion engine equivalents, according to the IEA’s energy technology policy head, Timar Guell.
Timar Guell, the IEA’s energy technology policy head, said that “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… for larger cars like SUVs and pick-ups, purchasing parity is likely to come later, probably into the 2030s.”
Governments are investing in EV expansion out of concerns over the environment, to boost industrial policy, and decrease dependency on oil. According to Birol, demand for oil will fall by 5 million barrels a day by 2030 because of the EV transition.
In China and Europe, SUVs and large cars make up almost two-thirds of EVs, with a greater proportion in the United States. Meanwhile, two- or three-wheel electric vehicles outnumber cars in emerging and developing economies. The study revealed that over half of India’s three-wheeler registrations in 2022 were electric.
(With inputs from Reuters)
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