(ATF) Global electric vehicle (EV) sales picked up speed in the first quarter, fuelled in China and Europe by tightening carbon dioxide emissions standards and government subsidies.
First-quarter global EV sales soared 140% to 1.1 million vehicles, with strong growth in China, Europe and the United States, the International Energy Agency (IEA) said on Thursday.
But more government action is needed on charging stations and fossil-fuel vehicle bans to keep the momentum going, IEA said.
"We still see no sign of a slowdown in global electric car markets," said Timur Gül, head of the IEA's energy technology policy division, in a presentation on the global outlook for EVs.
While the Covid-19 pandemic drove global car sales down 16% in 2020, EV sales jumped 41% to around 3 million vehicles, the IEA said.
Globally, consumers spent around $120 billion on EVs in 2020, while governments forked out around $13 billion in subsidies, or equivalent to around 10% of total spending, down from 20% of total spending in 2015.
IEA energy analyst Jacopo Tattini said governments need to tighten fuel economy standards and enforce existing mandates to increase sales of zero-emission vehicles while phasing out internal combustion engine (ICE) vehicles.
Governments also need to keep up spending on charging infrastructure, Tattini said.
Some governments have created EV-friendly policies. At the United Nations last September, China’s government has pledged to cut carbon dioxide emissions to nearly zero by 2060.
“Low-emissions transport, including EVs, will be one of the strategic industries helping the country achieve its climate goals,” Abigail Sun, equity analyst at Schroders in Hong Kong said.
Last year also saw policy updates that will accelerate the adoption of EVs in China, even as vehicle price subsidies are phased out. Beginning this year, mandatory emission quotas for internal combustion engines (ICE) and EVs are being tightened to help EVs reach 20% of new car sales by 2025.
Honda's new CEO Toshihiro Mibe announced that by 2030, the ratio of battery-powered EVs and fuel-cell electric vehicles of its unit sales in major markets would be 40%. By 2035, EVs are expected to account for 50% of all new car sales, according to IEA.
BLUEPRINT FOR CHANGE
At present, most car manufacturers are not selling EVs at a profit, but China’s new policies do amount to a blueprint for the transformation of the automotive sector and are expected to boost sales of EVs after two stagnant years. “This equates to around 6 million units a year, from 1.3 million in 2020,” Sun said.
Carmakers and environmental groups say more spending on EV chargers is needed to foster consumer confidence in the technology and support sales.
Chinese consumers, for example, have three main concerns about EVs: their high price, their limited driving range and the dearth of charging points.
Battery costs have fallen by more than 70% since 2014, narrowing the price gap between EVs and conventional gasoline cars.
Powertrains are the most expensive part of any vehicle so if battery costs continue to decline at annual single digit rates, EVs could achieve price parity with ICEs in the next five years.
In parallel, the efficiency and range of electric batteries have improved to the point where top-selling EV brands now have a driving range of 300-700 kilometres. This is similar to that of a traditional car running on petrol.
With reporting by Agence France-Presse