The world is witnessing a significant shift towards electric vehicles (EVs), with high petrol prices acting as a catalyst for this transition. The International Energy Agency (IEA) predicts that EVs will account for an impressive 30% of all new car sales this year, a trend that is being felt globally.
One of the most striking aspects of this EV revolution is China's dominance in the market. China's success can be attributed to its innovative approach to battery technology and manufacturing, which has resulted in an 80% share of battery cell production and an even higher dominance in the production of active materials for EV batteries. This has led to a remarkable drop in battery prices, with China's average battery costs being 30% lower than those in the US.
"The development in global car markets is truly staggering," says Alessandro Blasi of the IEA. China's ability to scale its EV battery manufacturing has given it a significant advantage, and its imports now account for over half of electric car sales outside Europe and the US.
However, while the rest of the world is embracing this transition, the US seems to be taking a step back. Despite global sales of conventional internal combustion engine vehicles peaking in 2017, the US is seeing a decline in EV sales growth. This is in stark contrast to other regions, where sales are surging. Europe, the Asia Pacific region (excluding China), and Latin America are all experiencing significant year-on-year increases in EV sales.
"The recovery of the global car market since the pandemic has been exclusively driven by sales of hybrid and electric cars," notes Araceli Fernandez Pales, an IEA technology analyst. This trend is expected to continue, with the IEA projecting that the global EV fleet will grow more than sixfold by 2035, reaching an impressive 510 million vehicles.
In Australia, the EV Council (EVC) has reported that battery electric and plug-in hybrid vehicles now account for a quarter of sales, mirroring the international growth. This surge in EV sales is being driven by a combination of factors, including rising petrol prices and geopolitical uncertainty.
"With surging petrol prices and geopolitical uncertainty, people around the world are making the sensible decision to step into EVs," says Aman Gaur, head of policy at the EVC. This shift towards EVs is not just a trend but a significant step towards a more sustainable future, and it will be interesting to see how this global transition unfolds, especially with China leading the way.
What makes this particularly fascinating is the potential for a major shift in the global automotive industry. China's dominance in EV technology and manufacturing could lead to a significant rebalancing of power in this sector, and it will be intriguing to see how other countries, especially the US, respond to this challenge.
