The International Energy Agency (IEA) reports on another record year for electric vehicles.

 

For the first time, the number of electric and plug-in hybrid cars on the world’s roads exceeded three million last year – a 54-per-cent increase on 2016 figures, according to the latest edition of the International Energy Agency (IEA)’s ‘Global Electric Vehicles Outlook’. Furthermore, the Paris-based institution – established to advise industrial nations on energy policy – expects the global fleet of electric vehicles (EVs) to more than triple to 13 million by the end of the decade (from 3.7 million last year), according to the IEA’s new report.

 

Driving the market

 

China remained by far the largest electric car market in the world, accounting for half of the units sold last year. Nearly 580,000 electric cars were sold in China in 2017, a 72-per-cent increase from the previous year. The US had the second-highest uptake, with about 280,000 cars sold in 2017 – up from 160,000 in 2016.

 

Nordic countries remain leaders in terms of market share. Electric cars accounted for 39 per cent of new car sales in Norway, making it the world leader in electric vehicle market share. In Iceland, new EV sales accounted for 12 per cent of the total, while the share reached six per cent in Sweden. Germany and Japan also saw strong growth, with sales more than doubling in both countries from their 2016 levels.

 

The electric mobility revolution is not limited to cars, however. In 2017, the stock of electric buses rose to 370,000 (from 345,000 in 2016), and the total number of electric two-wheelers reached 250 million. The electrification of those modes of transport has been driven almost entirely by China, which accounts for more than 99 per cent of both electric bus and two-wheeler stock, although registrations in Europe and India are also growing.

 

Growth in EV uptake has largely been driven by government policy, including public procurement programmes, financial incentives reducing the cost of purchase of EVs, tightened fuel-economy standards and regulations on the emission of local pollutants, low- and zero-emission vehicle mandates, and a variety of local measures (for example, restrictions on the circulation of vehicles based on their pollutant emission performances).

 

Charging more with less

 

The rapid uptake of EVs has also been helped by progress made in recent years to improve the performance and reduce the costs of lithium-ion batteries. However, further battery cost reductions and performance improvements are essential to improve the appeal of EVs. These are achievable with a combination of improved chemistries, increased production scale and battery sizes, according to the report. Further improvements are possible with the transition to technologies beyond lithium-ion.

 

Innovations in battery chemistry will also be needed to maintain growth, given the supply issues that exist with core elements that make up lithium-ion batteries, such as nickel, lithium and cobalt. Almost 60 per cent of the global production of cobalt is currently concentrated in the DRC, with China controlling 90 per cent of refining capacity. Even accounting for on-going developments in battery chemistry, cobalt demand for EVs is expected to be 10–25 times higher than current levels by 2030.

 

Nonetheless, looking forward, supportive policies and cost reductions are likely to lead to continued significant growth in the EV market. In the IEA’s New Policies Scenario, which takes into account current and planned policies, the number of electric cars is projected to reach 125 million units by 2030. Should policy ambitions rise even further to meet climate goals and other sustainability targets, as in the EV30@30 Scenario, the number of electric cars on the road could be as high as 220 million in 2030.