Catching Up With Climate Ambitions: Global EV Outlook 2023 Summary

Despite supply chain challenges, high commodity and energy prices, and macroeconomic and geopolitical uncertainties, sales of battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) saw another record year in 2022, with more than 10 million units sold. The share of electric vehicles sold also increased from 5% in 2020 and 9% in 2021 to 14% in 2022, with China again dominating the market with a share of around 60% of global EV sales.

With more than half of the world’s total EV fleet, China is already exceeding its 2025 target for new energy vehicle sales. Europe is the second largest market with a 15% share of EV sales, meaning that one in five cars sold is an electric car. Europe accounted for 10% of the total global growth in EV sales. The third largest market – the United States – achieved an 8% share of EV sales in total car sales.

Europe remains the second largest market for electric cars, accounting for 30% of the global electric car fleet. In Europe, the growth of electric cars remained stable despite the continuous decline of the car market (total car sales decreased by 3% in 2022 compared to 2021). Electric vehicle sales increased by 15% in 2022 compared to 2021, reaching 2.7 million EVs sold.

In Europe, Norway leads with an 88% share of electric car sales, followed by Sweden with 54%, the Netherlands with 35%, Germany with 31%, the United Kingdom with 23%, and France with 21% in 2022. In terms of volume, Germany is the largest European market with 830.000 sales in 2022 (due to post-pandemic incentives), followed by the UK with 370,000 and France with 330,000. In Italy, however, sales of electric vehicles dropped from 140,000 in 2021 to 115,000 in 2022. The same trend was observed in Austria, Denmark, and Finland.

The slowdown in Europe is mainly due to exceptional growth in previous years and high energy prices. Automakers were quick to adopt CO2 emission standards for the 2020-2024 period, leading to accelerated growth in EV sales in Europe. The new targets will only become more stringent from 2025 and 2030, making this intermediate period less progressive compared to previous years.

Although gasoline and diesel prices skyrocketed in 2022, this had a mixed impact on the competitiveness of EVs due to increases in residential electricity rates. Some automakers argue that the higher electricity and gas prices that caused the increase in manufacturing costs will also limit future investment in new battery production capacity.

Electric vehicle sales outlook for 2023

In the first quarter of 2023, 2.3 million electric vehicles were sold worldwide, representing a 25% year-on-year increase in global EV sales. With a projected 14 million sales by the end of the year, we expect a 35% year-over-year increase, and EVs could account for 18% of total global car sales, up from 14% in 2022.

In the United States, 320,000 EVs were sold in the first quarter of 2023, a 60% increase from the same period last year. This trend is expected to continue throughout the year, with the number of EVs sold rising to over 1.5 million in 2023, bringing the share of EVs sold in the US to around 12% in 2023.

China had a bit of a bumpy start, with January sales down 8% compared to last year. However, the first quarter showed a quick recovery with a 20% year-on-year increase, registering 1.3 million EVs. It is expected that the sales of EVs in China will be 30% higher than that in 2022, reaching around 8 million EVs with a share of over 35% by the end of 2023.

Growth in Europe is expected to be the slowest due to recent trends and tighter CO2 targets, which will not come into effect until 2025. In the first quarter, sales of electric vehicles increased by around 10% compared with the first quarter of 2022. For the full year, we currently expect an increase of 25%, with one in four cars sold in Europe being electric.

However, a sluggish global economy and the phase-out of subsidies for NEVs in China could negatively impact global sales of EVs in 2023. On the other hand, new markets could open faster than expected due to high oil prices. In addition, new policy developments could favour EV sales, such as the April 2023 proposal by the U.S. Environmental Protection Agency (EPA) to tighten greenhouse gas emission standards for cars.

The charging infrastructure

Although most of the demand for EVs is currently met by home charging, public charging stations are still an important factor in EV penetration in areas where home charging is limited. At the end of 2022, there were 2.7 million public charging points worldwide, of which more than 900,000 were installed in 2022 (55% more than in 2021).

More than 600.000 slow public chargers (with a capacity of 22 kW or less) were installed globally in 2022. In China, 360.000 slow chargers were installed, bringing the total stock to 1 million. In Europe, the total stock of slow EV chargers in 2022 was 460.000, up 50% from 2021, with the Netherlands leading the way with a total of 117.000 slow chargers installed, followed by around 74.000 in France and 64.000 in Germany. In the United States, the stock of public slow charging points will increase by 9% in 2022.

Public fast-charging stations, especially on highways, support long-distance travellers and positively impact range anxiety, which has been one of the barriers to EV adoption. The number of fast-charging stations worldwide increased by 330.000 by 2022, with most (nearly 90%) of the growth coming from China. In Europe, the total number of fast charging stations at the end of 2022 was 70.000, up 55% from 2021. Germany (over 12.000), France (9.700), and Norway (9.000) are the leading countries in terms of fast charging station stock. In the United States, 6.300 fast chargers were installed in 2022, about ¾ of which were Tesla Superchargers. The total inventory of fast chargers in the US was 28.000 at the end of 2022.

Moreover, as the number of BEVs increases, the ratio of charging points per EV decreases. For the mass adoption of electric cars, it is important to maintain stable accessibility of charging stations, either through private charging at home or at work or through publicly accessible charging stations.

Countries such as China, Korea, and the Netherlands, which rely heavily on public charging stations, have managed to match the speed of EV adoption by maintaining fewer than ten EVs per charging point. However, some countries are relying on home charging due to the higher percentage of single-family homes and the ability to install a private charger. In the USA, there are 24 EVs per charging station, and in Norway, there are even more than 30.

Perhaps more important is the public power supply capacity per EV, given that the fast chargers can serve more EVs than slow chargers. In line with this, AFIR includes requirements for the total power capacity based on the size of the registered fleet. Globally, it is lower, averaging about 1.2 kW per EV. Korea has the highest capacity of 7 kW per EV, with most public charging stations (90%) being slow chargers.

EV policies to bolster mass EV adoption and bring us closer to climate targets

Based on the existing policies worldwide, oil demand is expected to peak around 2025 in the IEA Stated Policies Scenario (STEPS), with the amount of oil displaced by EVs exceeding 5 million barrels per day in 2030. In the STEPS, it is projected that around 700 Mt CO2-equivalents will be avoided using EVs in 2030.

The European Union has adopted new CO2 standards for cars and vans that are aligned with the 2030 targets of the Fit for 55 package. It is also predicted that the Inflation Reduction Act (IRA), along with California’s Advanced Clean Cars II rule, could lead to a 50% market share for EVs in a number of states in 2030. In addition, the U.S. Environmental Protection Agency’s recently enacted emissions standards will further increase share.

The report is written based on the Global EV Outlook 2023 by IEA.