After a record-breaking 2021, Global EV sales are set for another surge in 2022

After a record-breaking 2021, global EV sales are set for another surge in 2022

Energize Weekly, February 9, 2022

After a record-breaking 2021, global electric passenger vehicle (EV) sales are poised to surge again in 2022, reaching 10.5 million, a nearly 60 percent annual increase, according to new analyses of the market.

In 2021, the number of EVs sold more than doubled, year-over-year, to 6.6 million, representing close to 9 percent of all cars sold for the year, according to the International Energy Agency (IEA).

“We estimate there are now around 16 million electric cars on the road worldwide, consuming roughly 30 terawatt-hours of electricity per year, the equivalent of all the electricity generated in Ireland,” IEA analysts said.

The trend is projected to continue in 2022 with hybrid and plug-in EV sales hitting the 10.5 million, according to a report by energy analyst BloombergNEF (BNEF).

Among the elements helping to sustain the sales momentum are an increase in models on the market and automakers pushing EVs, along with tougher government climate policies, BNEF said.

Still, rising raw material prices and supply chain problems could pose challenges for the EV market in 2022, the IEA said.

China was the top market for EVs in 2021, as sales almost tripled to 3.4 million electric cars and trucks.

The government’s decision to extend electric car subsidies for an additional two years after the pandemic broke out, is helping to boost the market, even as the subsidies were cut by 10 percent in 2021, with another 30 percent reduction set for 2022.

EV sales in Europe were up almost 70 percent with 2.3 million sales, with about half plug-in hybrids. Overall EVs accounts for 17 percent of all European auto sales in 2021.

“While annual growth was slower than in 2020, when sales more than doubled, this took place against the backdrop of an overall European automotive market that had not recovered from the pandemic,” the IEA said. 

The largest single European market was Germany where better than one in three new cars sold were electric.

The U.S. – the third largest market – saw sales more than double surpassing 500,000. While the U.S. auto market overall bounced back in 2021, EVs doubled its market share to 4.5 percent.

“Despite impressive growth in major markets, the sales of electric cars are not advancing at the same pace globally,” the IEA said. “China, Europe and the United States account for roughly two-thirds of the overall car market but around 90 percent of electric car sales. In most other markets, electric cars account for less than 2 percent of overall sales.”

Tesla continued to be the top EV automaker with 933,000 cars sold in 2021. Its sales were primarily in China and the U.S.

VW Group was in second place with 763,000 electric cars sold, mainly in Europe and China. Chinese automaker BYD was in third place with 598,000 EVs sold, almost exclusively in China.

The BNEF report said that China will remain the biggest market in 2022 with more than half of all global sales, followed by Europe with 30 percent of sales.

“The future looks bright for electric cars, but there are warning signals coming from their supply chain, with bulk material prices increasing for the entire auto industry,” the IEA said.

In 2021, for example, the price of steel was up as much as 100 percent, aluminum prices rose 70 percent, while copper prices increased by more than a third.

The material needed to make batteries also saw price surges, with lithium carbonate prices up 150 percent year-over-year, graphite by up by 15 percent, and nickel by 25 percent.

“While some of the supply constraints of 2021 will ease as the market rebalances, others may linger,” the IEA said. “For EVs to continue their current growth trajectory, battery supply chains and EV production capacity will have to expand at a rapid rate.”

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