IEA forecasts slower demand growth for EVs

Sales of electric vehicles (EVs) will continue to grow in most major markets this year, but at a slower rate, according to the latest Global EV Outlook report from the International Energy Agency (IEA).

Global EV sales this year are set to top 17mn, more than a fifth of total global vehicle sales, but growth is expected to slow in major markets compared with 2023.

Almost 14mn new EVs were registered last year, up by 35pc compared with 2022, with almost 95pc of EV sales coming from China, Europe and the US.

China is expected to account for over half of global EV sales this year, down from a share of around 60pc in the past two years, with sales expected to grow by 25pc on the year in 2024, passing 10mn for the first time.

Sales in the US are expected to grow by 20pc on the year to almost 500,000, accounting for an estimated one of every nine new vehicles sold in the country.

Growth in Europe is expected to be the weakest of the three, predicted to rise by just 10pc to around 3.5mn units in 2024. The phase-out of EV subsidies in Germany and other countries is expected to weigh on demand, although EVs are still forecast to account for around a fifth of all vehicle sales in the EU.

Smaller markets such as Vietnam and Thailand are expected to grow by 15pc and 10pc, respectively, this year.

Under the IEA's stated policies scenario, EVs make up half of all car sales by 2035, reducing oil demand by over 10mn b/d, equivalent to the amount used for road transport in the US today.

Chinese exports are expected to rise this year, after more than 60pc of Chinese EVs sold in 2023 were lower in price than their internal combustion engine (ICE) equivalents. Purchase prices for ICE cars remained cheaper on average in the US and EU.

China's largest carmaker BYD hit record monthly export sales in March, as nationwide exports continued to grow, raising concerns from US and EU officials about whether their carmakers will be able to compete.

Charging point installations are also set to increase, after a 40pc rise in 2023 from a year earlier and with particularly strong growth for fast chargers. Charging networks will need to grow sixfold by 2035 to meet EV sales targets set by governments, according to the report.

The IEA also said that policy makers must make sure that the supply of electricity is secure, affordable and emissions-light, while ensuring that electricity demand does not outstrip grid capacity during the transition to EVs.

By Chris Welch