There is plenty of hand-wringing at the COP28 climate conference in Dubai about the slow pace of reducing the consumption of fossil fuels to fight climate change. But one positive that delegates can point to is the growing fleet of electric vehicles worldwide that is already making a surprisingly big dent in demand.
There are currently around 12.8 million EVs on the world’s roads, up from just a few hundred thousand a few years ago. And if current trends continue, by 2023, the global fleet could exceed 26 million plug-in cars and trucks – representing almost a sixth of the world’s car sales.
A combination of environmental concerns, better vehicle choices, and lower battery costs are driving choices’ remarkable growth. But in many countries and regions, government policies also play a significant role. This includes energy-efficiency standards that drive down electricity use, subsidies like the $7,500 US Inflation Reduction Act credit for EV purchases, and other policy initiatives that lower or remove taxes on EVs and make them eligible for rebates.
In addition, the economics of EVs are improving as battery costs decline and production capacity increases. That’s helping to reduce the payback period – the time it takes for an EV to break even on operating costs compared with conventional cars. The EV market is still in its early stages, and many of the most popular models are only available in limited numbers, but it’s clear that the momentum behind them is gathering speed.
The most encouraging trend, however, is that EVs are increasingly becoming the preferred vehicle type in some of the most critical global markets. This is especially true in Europe, where EVs have already reached more than 40% of new car sales. But it’s a much more significant proportion in China and North America, where EVs have overtaken hybrids as the leading type of vehicle sold.
The growth of the EV fleet is helping to push down global energy prices. In 2022, the EV fleet consumed about 110 TWh of electricity (or about 0.5% of total final energy consumption), and this helped to displace about 0.7 Mb/d of oil. If the EV share grows in the coming years, it will eventually displace more than 8 Mb/d of oil.
EVs are also starting to grow in other transport modes, though they still account for only around 5% of sales globally. But over the longer term, buses and trucks, among the world’s most significant users of transport fuels, will shift much more to electric power.
The rapid progress on EVs is a welcome sign, but it’s far from enough to prevent catastrophic global warming. The task is to keep the momentum going and reach a net-zero emissions scenario as soon as possible. That’s why it’s so important that countries stay committed to the targets in their Paris Agreement. That’s the challenge that will dominate this week’s COP28 talks.
