The International Energy Agency (IEA) has forecast a robust increase in electric car sales for 2024, despite economic headwinds in certain markets. According to the IEA’s Global Electric Vehicle Outlook, electric car sales will reach 17 million this year, compared to 14 million in 2023. The report expects that more than one in five car sales globally will be electric cars, significantly impacting oil demand for road transport. Notably, the IEA expects China to account for 10 million of these electric vehicle sales.
Challenges amidst growth
While global sales data remains strong, challenges such as tight margins, volatile battery metal prices, high inflation and the phase-out of purchase incentives in some countries have sparked concerns about the industry’s growth pace. Nevertheless, electric car sales in the first quarter of 2024 saw a 25 percent increase compared to the same period last year. Moreover, first-quarter purchases were equivalent to the total electric car sales in 2020.
The IEA forecasts that the share of electric cars in total purchases will vary widely by region. The report expects that one in nine vehicle purchases in the United States will be electric. Meanwhile, in Europe, one in four sales will be electric. Notably, in China, the IEA expects nearly half of total car sales to be electric cars. In Europe, the phase-out of subsidies in some countries and a weak outlook for passenger car sales are holding back electric vehicle uptake.
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Costs and infrastructure challenges
Affordability remains a key factor influencing the growth of the electric car sector. While electric cars are becoming cheaper as battery prices drop and competition intensifies, internal combustion cars still remain more affordable in Europe and the United States. However, in China, nearly two-thirds of electric cars sold last year were cheaper than traditional equivalents.
In addition to affordability, the expansion of charging infrastructure poses a significant challenge. The IEA highlights the need for charging networks to grow six-fold by 2035 to meet the growing demand for electric vehicles. Ensuring adequate infrastructure will be crucial in supporting the continued growth of electric vehicle adoption globally.
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