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Nearly one in four cars sold this year globally will be electric, according to the International Energy Agency’s latest Global EV Outlook, with the EV market expected to take a 40 per cent share by 2030.
The latest annual report, released on Wednesday, forecasts that worldwide sales will surpass 20 million this year, helped along by price parity between EVs and petrol and diesel versions in many key markets, particularly in China and Asia.
This means that economic troubles and industry uncertainty have not yet put a dampener on global EV market growth, with sales in the first quarter of this year up 35 per cent year-on-year.
The results follow a record-breaking year in 2024, when sales exceeded 17 million globally in 2024, amounting to 20 per cent of the market – a worldwide first.
And, based on current progress, the report finds that the EV share of the global car market is on track to hit 40 per cent by 2030.
“It is clear that electric cars have become an integral part of the car manufacturing industry across the world,” said IEA Executive Director Fatih Birol in a press conference on Wednesday. “And governments and companies are implementing new policies on the basis of this very trend.”
China dominates EV market
According to the report, China maintains its position as by far the EV market leader, with electric cars accounting for almost half of its car sales in 2024.
Source: International Energy Agency (IEA).
The number of EVs sold in China last year (over 11 million) is equivalent to the total amount of EVs sold worldwide in 2022.
But other, emerging markets have been centres of growth in the past year, including Thailand, Brazil and Vietnam. Across all these emerging markets, total EV sales surging by more than 60 per cent.
Source: International Energy Agency (IEA).
In the US, EV sales grew by about 10 per cent year-on-year. Meanwhile European sales stagnated at a (still impressive) market share of around 20 per cent.
“Our data shows that, despite significant uncertainties, electric cars remain on a strong growth trajectory globally,” said Birol. “Sales continue to set new records, with major implications for the international auto industry.”
In Australia, 2024 saw the EV share of new car sales grow to almost 10 per cent, despite a major slump in new sales of both Tesla and Polestar EVs.
Australia’s Electric Vehicle Council (EVC) estimates new EVs will make up 15-19 per cent of total sales by 2026, meaning Australia, despite lagging behind, is still on track for growth – despite a stall in sales so far this year, largely due to a drop in Tesla deliveries.
Electric truck sales soaring
The report also took a look at the electric truck market.
Remarkably, global electric truck sales increased by around 80 per cent in 2024, amounting to close to 2 per cent of all truck sales worldwide.
That growth was, predictably, driven in large part by a doubling of sales in China, where electric trucks are cost-competitive with their ICE counterparts.
Affordability key factor
The report notes that rising affordability in some markets has been a driving factor in the dramatic growth in EV sales this year.
Globally, the average price of an EV fell in 2024 thanks to growing competition and declining production costs.
In Australia that has been borne out over the last few years with the introduction of new, cheaper market players from China, a trend that looks set to continue this year.
Within China, costs are declining rapidly, with two-thirds of all EVs sold in the country last year priced lower than their international combustion engine (ICE) equivalents, even without including the impact of tax incentives.
And Chinese exports have dramatically lowered prices in other markets: in Thailand, BEVs have reach price parity with ICE cars thanks in large part to an influx of lower-cost Chinese brands.
Source: International Energy Agency (IEA).
By contrast, the average EV car price in Germany remained 20 per cent higher than that of the ICE equivalent.
“That’s one of the reasons, in my view, why the penetration of electric cars [in Europe and the US] are slower compared to China,” said Birol.
But even where the upfront costs are larger, EVs have proven cheaper to operate across all key markets, thanks in part to current energy prices.
And, according to the report, even if oil prices fell as low as US$40 per barrel, running an EV in Europe via home charging would still cost about half as much as running a conventional car.
Riding the waves of uncertainty
Amid international trade disputes, and a volatile global economy, the IEA warns this outlook is imbued with inherent uncertainty.
Despite this, Birol said three major determinants would make or break the future of the EV market.
The first, of course, was the fragile global trade situation, which poses a risk not just to the EV sector but the entire economy.
The second was technological advancement: Birol pointed out that innovation in charging, batteries, and other aspects of the design of EVs would be critical to uptake, both practically, in terms of making EVs easier to run, and psychologically, by combatting the effect of range anxiety.
The third determinant Birol identified was the critical minerals trade.
As Birol pointed out, the mining and manufacture of the critical minerals needed to build electric cars is geographically concentrated – largely in China (though Australia is also a major player in the global metals trade).
He said that concentration of industry could have implications for the security of global supply chains.
“In terms of energy security, one of our golden rules is diversification,” Birol said. “So, if you want to see more diversification in the manufacture of electric cars, there is a need for other countries, other markets, to be significant players in the game.”
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