IEA's Global EV Outlook 2022: Megatrends and takeaways

The International Energy Agency (IEA) has released the Global EV Outlook 2022 report that identifies and analyses recent developments in electric mobility across the globe. Combining historic findings with projections for 2030, the report examines key areas such as the deployment of electric vehicles (EV) and charging infrastructure, energy use, CO2 emissions, and battery demand.

The report incorporates lessons from frontrunner markets to help policymakers and stakeholders identify the measures and market systems that would best support electric vehicle adoption. It also suggests several recommendations to accelerate the uptake of EVs worldwide.

The Global EV Outlook 2022 puts the EV market as the most dynamic area in clean energy, with sales doubling in 2021 from the previous year to a new record of 6.6 million. This uptick continues in 2022 as well, with 2 million EVs sold in the first quarter, up 75 percent from the same period in 2021. About 10 percent of global car sales were electric last year, nearly four times the market share in 2019, according to the report.

In terms of geography, China continues to define the global EV sales figures in 2021, accounting for half of the growth. The Q1 2022 showed similar trends, with sales in China more than doubling compared with the same period last year, a 60 percent increase in the United States, and a 25 percent increase in Europe.

The report notes that the price gap between EVs and their ICE rivals is decreasing in China, alongside lower development and manufacturing costs. In 2021, the sales-weighted median price of EVs in China was only 10 percent more than that of conventional vehicles, compared with 45-50 percent on average in other major markets. On the other hand, EV sales are still lagging in other emerging markets like Brazil, India, and Indonesia.

However, supporting investments and policies can pave the way for quicker market uptake by 2030, given emerging demand in these markets. The Global EV Outlook identifies sustained policy support as a strong pillar for EV growth across the globe. Public spending on subsidies and incentives for EVs nearly doubled in 2021 to nearly USD 30 billion.

On charging infrastructure, the report states that the amount of public charging infrastructure that has been announced might be insufficient to power the size of the EV market being targeted by 2030. Charging at home and workplace are likely to supply much of the demand overall, but the number of public chargers still needs to expand ninefold and reach over 15 million units in 2030.

The latest Global EV Outlook warns that the supply constraints on critical minerals for EV batteries are fast looming, thanks to the pressures put forth by the ever-increasing demand for batteries and the Russia-Ukraine war. Lack of structural investment in new supply capacity is seen as a significant problem, as the battery supply chains are heavily concentrated around select countries, in particular, China.

It calls for additional investments in the short term, particularly in mining, where lead times are much longer than for other parts of the supply chain. Governments in Europe and the United States have bold public sector initiatives to develop domestic battery supply chains, but the majority of the supply chain is likely to remain Chinese through 2030, notes the report.

A shift towards less mineral-intensive cathode chemistries is likely if the current price volatility of critical metals endures. The report makes note of the growing popularity of LFP chemistry in this regard, along with innovation in new chemistries, such as manganese-rich cathodes or even sodium-ion, and also recycling to some extent, that could further reduce the pressure on mining.