In a recent forecast, the International Energy Agency (IEA) predicts a significant rise in electric car sales in 2024, reaching 17 million compared to 14 million in 2023. This surge, according to the IEA, is driven by various factors, including concerns about climate change, improving technology, and government incentives. However, the IEA also highlights key challenges that could impact future growth, such as affordability and the availability of charging infrastructure.
The IEA expects more than one in five cars sold globally to be electric this year, which would have a notable impact on reducing oil demand for road transport. China is expected to lead this surge, with an estimated 10 million electric vehicles to be sold in the country.
Despite the positive outlook, the IEA acknowledges challenges facing the industry, including tight margins, volatile battery metal prices, high inflation, and the phase-out of purchase incentives in some countries. These factors have raised concerns about the pace of growth in the electric vehicle sector.
In terms of market share, electric cars are expected to represent about one in nine vehicle purchases in the United States, one in four in Europe, and nearly half in China. However, the uptake in Europe is being hampered by weak passenger car sales and the phase-out of subsidies in some countries.
Affordability remains a key factor in the sector’s growth, with electric cars generally becoming cheaper as battery prices drop, competition intensifies, and carmakers achieve economies of scale. However, internal combustion cars still remain more affordable than their electric counterparts in Europe and the United States.
Addressing the growing demand for electric vehicles will also require significant expansion of charging infrastructure. The IEA estimates that charging networks will need to grow six-fold by 2035 to meet this demand.
Overall, while the electric vehicle sector is experiencing strong growth, challenges related to affordability and charging infrastructure will need to be addressed to sustain this momentum.
