Global EV
Outlook 2023

Catching up with climate ambitions

INTERNATIONAL ENERGYAGENCYThe IEA examines thefull spectrumof energy issues
including oil, gas andcoal supply anddemand, renewableenergy technologies,
electricity markets,energy efficiency,
access to energy,
demand side
management andmuch more. Throughits work, the IEA
advocates policies thatwill enhance thereliability, affordability
and sustainability ofenergy in its
31 member countries,
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and beyond.

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frontiers and boundaries andto the name of any territory,
city or area.

Source: IEA.
International Energy Agency
Website: www.iea.org

IEA member
countries:

IEA association
countries:

Australia
Austria
Belgium
CanadaCzech Republic
Denmark
Estonia
FinlandFranceGermany
GreeceHungary
Ireland
Italy
Japan
Korea
Lithuania
Luxembourg
MexicoNetherlands
New Zealand
NorwayPolandPortugal
Slovak Republic
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Indonesia
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The European
Commission also
participates in thework of the IEAGlobal EV Outlook 2023
Catching up with climate ambitions

Abstract

Abstract
The Global EV Outlook is an annual publication that identifies and discusses
recent developments in electric mobility across the globe. It is developed with thesupport of the members of the Electric Vehicles Initiative (EVI).
Combining historical analysis with projections to 2030, the report examines key
areas of interest such as electric vehicle and charging infrastructure deployment,
battery demand, electricity consumption, oil displacement, greenhouse gas
emissions and related policy developments. The report includes analysis oflessons learned from leading markets to inform policy makers and stakeholders
about policy frameworks and market systems for electric vehicle adoption.

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This edition features analysis of the financial performance of EV-relatedcompanies, venture capital investments in EV-related technologies, and trade ofelectric vehicles. Finally, the report makes available two online tools: the Global
EV Data Explorer and Global EV Policy Explorer, which allow users to interactively
explore EV statistics and projections, and policy measures worldwide.

Global EV Outlook 2023
Catching up with climate ambitions

Acknowledgements

Acknowledgements, contributors
and credits
The Global EV Outlook 2023 was prepared by the Energy Technology Policy(ETP) Division of the Directorate of Sustainability, Technology and Outlooks(STO) of the International Energy Agency (IEA). The project was designed anddirected by Timur Gül, Head of the Energy Technology Policy Division. Araceli
Fernandez Pales, Head of the Technology Innovation Unit, provided strategic
guidance throughout the development of the project. Elizabeth Connelly
co-ordinated the analysis and production of the report.
The principal IEA authors were (in alphabetical order): Oskaras Alsauskas,
Elizabeth Connelly, Andrew Daou, Alexandre Gouy, Mathilde Huismans, Hyeji
Kim, Jean-Baptiste Le Marois, Shane McDonagh, Apostolos Petropoulos andJacob Teter. Takashi Nomura, Aditya Ramji and Biqing Yang contributed to theresearch on EV-supportive policies and OEM electrification plans. Laurence Cret,
Amrita Dasgupta, Stavroula Evangelopoulou and Carl Greenfield provided
targeted support to the project.
Keisuke Sadamori, IEA’s Director for Energy Markets and Security; Laura
Cozzi, IEA’s Chief Energy Modeller; Tim Gould, IEA’s Chief Energy Economist;
and Stéphanie Bouckaert, Head of the Demand Sectors Unit provided
valuable insights and feedback. The development of this report benefited fromcomments from IEA colleagues: Tanguy De Bienassis, Julia Guyon, Megumi
Kotani, Alison Pridmore, Thomas Spencer and Jacques Warichet. Per-Anders
Widell provided essential support throughout the process. Lizzie Sayer
edited the manuscript.
Thanks also to Curtis Brainard, Poeli Bojorquez, Jon Custer, Astrid
Dumond, Merve Erdil, Grace Gordon, Oliver Joy, Barbara Moure, Jad
Mouawad, Jethro Mullen, Isabelle Nonain-Semelin, Julie Puech, Charner
Ramsey, Clara Vallois, Gregory Viscusi, Lucile Wall, and Wonjik Yang of theCommunications and Digital Office.

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The work could not have been achieved without the financial support provided by
the EVI member governments, including Canada, Chile, China, Finland,
Germany, India, Japan, the Netherlands, New Zealand, Norway, Poland,
Sweden, United Kingdom and the United States.

Global EV Outlook 2023
Catching up with climate ambitions

Acknowledgements

The report benefited from the high calibre data and support provided by thefollowing colleagues: Thaíssa Antunes (Ministry of Mines and Energy, Brazil);
Daniel Barber (Energy Efficiency and Conservation Authority, New Zealand); Lisa
Bjergbakke (Centre for Systems Analysis, Denmark); Klaas Burgdorf (Swedish
Energy Agency); Isabel Del Olmo Flórez (Institute for Diversification and Savingof Energy, Spain); Laurent Demilie (Federal Public Service Mobility and Transport,
Belgium); Albert
Dessi (Department of Climate Change, Energy, theEnvironment and Water, Australia); Fatima Habib (Office for Zero Emission
Vehicles, United Kingdom); Nishi Hidetaka and Taiki Watanabe (Ministry of
Economy, Trade and Industry, Japan; Kaja Jankowska (Ministry of Climate andEnvironment, Poland); Federico Karagulian (ENEA, Italy); Sylène Lasfargues(Ministry of Ecological Transition, France); Sky Liu (China Society of Automotive
Engineers); Walter Mauritsch (Austrian Energy Agency); Gereon Meyer (VDI/VDE
Innovation + Technik GmbH, Germany), Matteo Muratori (NREL, United States);Andi Novianto (Coordinating Ministry for Economic Affairs, Indonesia); Elvis
Octave (Seychelles Public Transport Corporation); Sameer Pandit (Bureau ofEnergy Efficiency, India); Hiten Parmar (uYilo e-Mobility Programme, South
Africa); Velvet Rosemberg Fuentes (Secretariat of Energy, Mexico); Kitchanon
Ruangjirakit (King Mongkut's University of Technology Thonburi, Thailand); Daniel
Schaller (Swiss Federal Office of Energy); Daniel Thorsell (Norwegian Public
Roads Administration; Sai Santhosh Tota (VTT, Finland); Luz Ubilla Borquez(Ministry of Energy, Chile); Katerina Vardava (Ministry of Environment andEnergy, Greece); Alexandre Videira (Mobi.E, Portugal); William Visser(Netherlands Enterprise Agency, Netherlands). Francois Cuenot (UNECE)
provided the box on technical regulations.

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Peer reviewers provided essential feedback to improve the quality of the report.
They include: Koichiro Aikawa (Honda); Takafumi Anegawa (TEPCO); Thaíssa
Antunes (Ministry of Mines and Energy, Brazil); Angel Carlos Aparicio andBahtiyar Kurt (UNDP); Harmeet Bawa (Hitachi Energy); Maya Ben Dror (WEF
Circular Car Initiative); Filippo Berardi and Esteban Bermudez Forn (GEF
Secretariat); Georg Bieker and Marie Rajon Bernard (ICCT); Tomoko Blech(CHAdeMO); Krzysztof Burda, Paulina Muszyńska and Marcin Nowak (PolishChamber of E-Mobility, PIRE); Carol Burelle (HEV TCP); Klaas Burgdorf (Swedish
Energy Agency); Francisco Cabeza (Element); Ryan Castilloux (Adams
Intelligence); Yong Chen and Nicholas Wagner (IRENA); Matteo Craglia (ITF);
Francois Cuenot (UNECE); Ilka von Dalwigk (InnoEnergy - European Battery
Alliance); Thomas Deloison (WBCSD), Laurent Demilie (Federal Public Service
Mobility and Transport, Belgium); Albert Dessi (Department of Climate Change,
Energy, the Environment and Water, Australia); Alejandro Falkner Falgueras (EnelGrids); Aaron Fishbone (Charge-Up); Hiroyuki Fukui, Marie Ishikawa and Hidenori
Moriya (Toyota); Yariv Gabay (Ministry of Finance, Israel); Saki Gerassis-Davite(DG Mobility and Transport, European Commission); Xavier Guichet (IFPEN);

Global EV Outlook 2023
Catching up with climate ambitions

Acknowledgements

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Nishi Hidetaka and Taiki Watanabe (Ministry of Economy, Trade and Industry,
Japan); Nikolas Hill (Ricardo AEA); Antonio Iliceto (Terna Rete Italia); Kaja
Jankowska (Ministry of Climate and Environment, Poland); Daisy Jennings-Gray(Benchmark mineral intelligence); Hiroyuki Kaneko (Nissan Motor Co., Ltd);
Federico Karagulian and Francesco Vellucci (ENEA, Italy); Paolo Liel Karpel (EnelX); Tarek Keskes (World Bank); Yossapong Laoonual (King Mongkut's Universityof Technology Thonburi); Sylène Lasfargues (Ministry of Ecological Transition,
France); Francisco Laveron (Iberdrola); Pimpa Limthongkul (Entec Thailand); Sky
Liu (China Society of Automotive Engineers); Aaron Loiselle (Environment andClimate Change Canada); Maurizio Maggiore (DG Research & Innovation,
European Commission); John Maples (EIA, Department of Energy, US); Indradip
Mitra (GIZ); Matteo Muratori (NREL); Khac-Tiep Nguyen (UNIDO); Andi Novianto(Coordinating Ministry for Economic Affairs, Indonesia); Mario Duran Ortiz(Independent); Alessio Pastore and Davide Puglielli (Enel); Karl Piskorek (BMW);
Patrick Plötz (Fraunhofer); Lucija Rakocevic (Th!nk E); Sandra Rolling (TheClimate Group); Sacha Scheffer (Ministry of Infrastructure and Water
Management, Netherlands); Erno Scheers (Shell); Lorenzo Schirinzi (Enel XWay); Wulf-Peter Schmidt (Ford); Sudhendu Jyoti Sinha (India); Robert Spicer(BP); Thierry Spiess (Natural Resources Canada); Detlef Stolten (AFC TCP);
Jacopo Tattini (JRC, European Commission); Joscelyn Terrell and Fatima Habib(Office for Zero Emission Vehicles, UK); Daniel Thorsell (Norwegian Public Road
Administration); Lyle Trytten (Independent); Katarina Vardava (Ministry ofEnvironment and Energy, Greece); Michael Wang (Argonne National Lab) and
Caroline Watson (C40).

Global EV Outlook 2023
Catching up with climate ambitions

Table of contents

Table of contents
Executive summary ................................................................................................................ 8
Electric Vehicles Initiative .....................................................................................................13
Trends and developments in EV markets ........................................................................... 14
Electric light-duty vehicles.................................................................................................. 14
Electric heavy-duty vehicles............................................................................................... 38
Charging infrastructure ...................................................................................................... 43
Batteries............................................................................................................................. 55
Policy developments and corporate strategy .................................................................... 63
Overview ............................................................................................................................ 63
Policy to develop EV supply chains ................................................................................... 66
Policy support for electric light-duty vehicles ..................................................................... 72
Policy support for electric heavy-duty vehicles .................................................................. 81
Policy support for EV charging infrastructure ..................................................................... 83
A multiplying number of international initiatives and pledges ............................................. 86
Electrification plans by original equipment manufacturers (OEMs) .................................... 89
Global spending on electric cars continues to increase ..................................................... 93
Finance, venture capital and trade ..................................................................................... 95
Prospects for electric vehicle deployment ....................................................................... 107
Outlook for electric mobility .............................................................................................. 107
Battery demand ............................................................................................................... 121
Charging infrastructure .................................................................................................... 123
Impact on energy demand and emissions ....................................................................... 129

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General annex ..................................................................................................................... 137

Global EV Outlook 2023
Catching up with climate ambitions

Executive summary

Executive summary
Electric car sales break new records with momentum
expected to continue through 2023
Electric car markets are seeing exponential growth as sales exceeded
10 million in 2022. A total of 14% of all new cars sold were electric in 2022, up
from around 9% in 2021 and less than 5% in 2020. Three markets dominatedglobal sales. China was the frontrunner once again, accounting for around 60% of
global electric car sales. More than half of the electric cars on roads worldwide are
now in China and the country has already exceeded its 2025 target for new energy
vehicle sales. In Europe, the second largest market, electric car sales increasedby over 15% in 2022, meaning that more than one in every five cars sold waselectric. Electric car sales in the United States – the third largest market –increased 55% in 2022, reaching a sales share of 8%.
Electric car sales are expected to continue strongly through 2023. Over
2.3 million electric cars were sold in the first quarter, about 25% more than in thesame period last year. We currently expect to see 14 million in sales by the end of2023, representing a 35% year-on-year increase with new purchases acceleratingin the second half of this year. As a result, electric cars could account for 18% of
total car sales across the full calendar year. National policies and incentives will
help bolster sales, while a return to the exceptionally high oil prices seen last year
could further motivate prospective buyers.

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There are promising signs for emerging electric vehicle (EV) markets, albeit
from a small base. Electric car sales are generally low outside the major markets,
but 2022 was a growth year in India, Thailand and Indonesia. Collectively, salesof electric cars in these countries more than tripled compared to 2021, reaching
80 000. For Thailand, the share of electric cars in total sales came in at slightly
over 3% in 2022, while both India and Indonesia averaged around 1.5% last year.
In India, EV and component manufacturing is ramping up, supported by thegovernment’s USD 3.2 billion incentive programme that has attracted investments
totalling USD 8.3 billion. Thailand and Indonesia are also strengthening theirpolicy support schemes, potentially providing valuable experience for otheremerging market economies seeking to foster EV adoption.

Global EV Outlook 2023
Catching up with climate ambitions

Executive summary

Landmark EV policies are driving the outlook for EVs
closer to climate ambitions
Market trends and policy efforts in major car markets are supporting a brightoutlook for EV sales. Under the IEA Stated Policies Scenario (STEPS), theglobal outlook for the share of electric car sales based on existing policies and firm
objectives has increased to 35% in 2030, up from less than 25% in the previous
outlook. In the projections, China retains its position as the largest market forelectric cars with 40% of total sales by 2030 in the STEPS. The United States
doubles its market share to 20% by the end of the decade as recent policy
announcements drive demand, while Europe maintains its current 25% share.
Projected demand for electric cars in major car markets will have profound
implications on energy markets and climate goals in the current policy
environment. Based on existing policies, oil demand from road transport is
projected to peak around 2025 in the STEPS, with the amount of oil displaced byelectric vehicles exceeding 5 million barrels per day in 2030. In the STEPS,
emissions of around 700 Mt CO2-equivalents are avoided by the use of electriccars in 2030.
The European Union and the United States have passed legislation to match
their electrification ambitions. The European Union adopted new CO2
standards for cars and vans that are aligned with the 2030 goals set out in the Fit
for 55 package. In the United States, the Inflation Reduction Act (IRA), combinedwith adoption of California’s Advanced Clean Cars II rule by a number of states,
could deliver a 50% market share for electric cars in 2030, in line with the nationaltarget. The implementation of the recently proposed emissions standards from the
US Environmental Protection Agency is set to further increase this share.
Battery manufacturing continues to expand, encouraged by the outlook forEVs. As of March 2023, announcements on battery manufacturing capacity
delivered by 2030 are more than sufficient to meet the demand implied bygovernment pledges and would even be able to cover the demand for electricvehicles in the Net Zero Emissions by 2050 Scenario. It is therefore well possiblethat higher shares of sales are achievable for electric cars than those anticipatedon the basis of current government policy and national targets.

As spending and competition increase, a growing
number of more affordable models come to market

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Global spending on electric cars exceeded USD 425 billion in 2022, up 50%
relative to 2021. Only 10% of the spending can be attributed to government
support, the remainder was from consumers. Investors have also maintained
confidence in EVs, with the stocks of EV-related companies consistentlyGlobal EV Outlook 2023
Catching up with climate ambitions

Executive summary

outperforming traditional carmakers since 2019. Venture capital investments instart-up firms developing EV and battery technologies have also boomed,reaching nearly USD 2.1 billion in 2022, up 30% relative to 2021, with investments
increasing in batteries and critical minerals.
SUVs and large cars dominate available electric car options in 2022. They
account for 60% of available BEV options in China and Europe and an evengreater share in the United States, similar to the trend towards SUVs seen ininternal combustion engine (ICE) car markets. In 2022, ICE SUVs emitted over
1 Gt CO2, far greater than the 80 Mt net emissions reductions from the electricvehicle fleet that year. Battery electric SUVs often have batteries that are two- tothree-times larger than small cars, requiring more critical minerals. However, lastyear electric SUVs resulted in the displacement of over 150 000 barrels of oil
consumption per day and avoided the associated tailpipe emissions that would
have been generated through burning the fuel in combustion engines.
The electric car market is increasingly competitive. A growing number of new
entrants, primarily from China but also from other emerging markets, are offering
more affordable models. Major incumbent carmakers are increasing ambition as
well, especially in Europe, and 2022-2023 saw another series of important EV
announcements: fully electric fleets, cheaper cars, greater investment, and vertical
integration with battery-making and critical minerals.
Consumers can choose from an increasing number of options for electriccars. The number of available electric car models reached 500 in 2022, more thandouble the options available in 2018. However, outside of China, there is a needfor original equipment manufacturers (OEMs) to offer affordable, competitively
priced options in order to enable mass adoption of EVs. Today’s level of available
electric car models is still significantly lower than the number of ICE options on themarket, but the number of ICE models available has been steadily decreasing
since its peak in the mid-2010s.

Focus expands to electrification of more vehicle
segments as electric cars surge ahead

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Electrification of road transport goes beyond cars. Two or three-wheelers are
the most electrified market segment today; in emerging markets and developing
economies, they outnumber cars. Over half of India’s three-wheeler registrationsin 2022 were electric, demonstrating their growing popularity due to government
incentives and lower lifecycle costs compared with conventional models,
especially in the context of higher fuel prices. In many developing economies,
two/three-wheelers offer an affordable way to get access to mobility, meaning theirelectrification is important to support sustainable development.

Global EV Outlook 2023
Catching up with climate ambitions

Executive summary

The commercial vehicle stock is also seeing increasing electrification.
Electric light commercial vehicle (LCV) sales worldwide increased by more than
90% in 2022 to more than 310 000 vehicles, even as overall LCV sales declined
by nearly 15%. In 2022, nearly 66 000 electric buses and 60 000 medium- andheavy-duty trucks were sold worldwide, representing about 4.5% of all bus sales
and 1.2% of truck sales. Where governments have committed to reduce emissions
from public transport, such as in dense urban areas, electric bus sales reachedeven higher shares; in Finland, for example, electric bus sales accounted for over
65% in 2022.
Ambition with respect to electrifying heavy-duty vehicles is growing. In
2022, around 220 electric heavy-duty vehicle models entered the market, bringing
the total to over 800 models offered by well over 100 OEMs. A total of 27
governments have pledged to achieve 100% ZEV bus and truck sales by 2040
and both the United States and European Union have also proposed stronger
emissions standards for heavy-duty vehicles.

EV supply chains and batteries gain greater prominencein policy-making
The increase in demand for electric vehicles is driving demand for batteries
and related critical minerals. Automotive lithium-ion (Li-ion) battery demand
increased by about 65% to 550 GWh in 2022, from about 330 GWh in 2021,
primarily as a result of growth in electric passenger car sales. In 2022, about 60%
of lithium, 30% of cobalt and 10% of nickel demand was for EV batteries. Only five
years prior, these shares were around 15%, 10% and 2%, respectively. Reducing
the need for critical materials will be important for supply chain sustainability,
resilience and security, especially given recent price developments for battery
material.
New alternatives to conventional lithium-ion are on the rise. The share oflithium-iron-phosphate (LFP) chemistries reached its highest point ever, driven
primarily by China: around 95% of the LFP batteries for electric LDVs went into
vehicles produced in China. Supply chains for (lithium-free) sodium-ion batteries
are also being established, with over 100 GWh of manufacturing capacity either
currently operating or announced, almost all in China.

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The EV supply chain is expanding, but manufacturing remains
highly concentrated in certain regions, with China being the main player
in battery and EV component trade. In 2022, 35% of exported electric cars
came from China, compared with 25% in 2021. Europe is China’s largest
trade partner for both electric cars and their batteries. In 2022, the share ofelectric cars manufactured in China and sold in the European market increased
to 16%, up from about 11% in 2021.

Global EV Outlook 2023
Catching up with climate ambitions

Executive summary

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EV supply chains are increasingly at the forefront of EV-related policymaking to build resilience through diversification. The Net Zero Industry Act,
proposed by the European Union in March 2023, aims for nearly 90% of theEuropean Union’s annual battery demand to be met by EU battery manufacturers,
with a manufacturing capacity of at least 550 GWh in 2030. Similarly, India aims
to boost domestic manufacturing of electric vehicles and batteries throughProduction Linked Incentive (PLI) schemes. In the United States, the Inflation
Reduction Act emphasises the strengthening of domestic supply chains for EVs,
EV batteries and battery minerals, laid out in the criteria to qualify for clean vehicle
tax credits. As a result, between August 2022 and March 2023, major EV andbattery makers announced cumulative post-IRA investments of at least
USD 52 billion in North American EV supply chains – of which 50% is for battery
manufacturing, and about 20% each for battery components and EV
manufacturing.

Global EV Outlook 2023
Catching up with climate ambitions

Electric Vehicles Initiative

Electric Vehicles Initiative
The Electric Vehicles Initiative (EVI) is a multi-governmental policy forum
established in 2010 under the Clean Energy Ministerial (CEM). Recognising theopportunities offered by EVs, the EVI is dedicated to accelerating the adoption of
EVs worldwide. To do so, it strives to better understand the policy challenges
related to electric mobility, to help governments address them and to serve as aplatform for knowledge-sharing among government policy makers. The EVI also
facilitates exchanges between government policy makers and a variety of otherpartners on topics important for the transition to electric mobility, such as charging
infrastructure and grid integration as well as EV battery supply chains. In 2022,
Zero Emission Government Fleet Declaration was launched within the EVI, astrong commitment among government to move towards 100% zero emission
vehicles in public procurement.
The International Energy Agency serves as the co-ordinator of the initiative.
Governments that have been active in the EVI in the 2022-23 period include
Canada, Chile, People’s Republic of China (hereafter “China”), Finland, France,
Germany, India, Japan, the Netherlands, New Zealand, Norway, Poland, Portugal,
Sweden, United Kingdom and United States. Canada, China and the UnitedStates are the co-leads of the initiative.

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The Global EV Outlook annual series is the flagship publication of the EVI. It is
dedicated to tracking and monitoring the progress of electric mobility worldwide
and to informing policy makers on how to best accelerate electrification of the roadtransport sector.

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

Trends and developments in EV
markets
Electric light-duty vehicles
Electric car sales continue to increase, led by China
Electric car sales 1 saw another record year in 2022, despite supply chain
disruptions, macro-economic and geopolitical uncertainty, and high commodityand energy prices. The growth in electric car sales took place in the context ofglobally contracting car markets: total car sales in 2022 dipped by 3% relative to2021. Electric car sales – including battery electric vehicles (BEVs) and plug-in
hybrid electric vehicles (PHEVs) – exceeded 10 million last year, up 55% relative
to 2021. 2 This figure – 10 million EV sales worldwide – exceeds the total numberof cars sold across the entire European Union (about 9.5 million vehicles) and isnearly half of the total number of cars sold in China in 2022. In the course of justfive years, from 2017 to 2022, EV sales jumped from around 1 million to more than
10 million. It previously took five years from 2012 to 2017 for EV sales to growfrom 100 000 to 1 million, underscoring the exponential nature of EV sales growth.
The share of electric cars in total car sales jumped from 9% in 2021 to 14% in
2022, more than 10 times their share in 2017.

Over 26 million electric cars were on the road in 2022, up
60% relative to 2021 and more than 5 times the stock in
2018
Increasing sales pushed the total number of electric cars on the world’s roads to
26 million, up 60% relative to 2021, with BEVs accounting for over 70% of total
annual growth, as in previous years. As a result, about 70% of the global stock ofelectric cars in 2022 were BEVs. The increase in sales from 2021 to 2022 was justas high as from 2020 to 2021 in absolute terms – up 3.5 million – but relative
growth was lower (sales doubled from 2020 to 2021). The exceptional boom in
2021 may be explained by EV markets catching up in the wake of the coronavirus

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1
The term sales, as used in this report, represents an estimate of the number of new vehicles hitting the roads. Where
possible, data on new vehicle registrations is used. In some cases, however, only data on retail sales (such as sales from adealership) are available. See Box 1.2 for further details. The term car is used to represent passenger light-duty vehicles andincludes cars of different sizes, sports utility-vehicles and light trucks.
2
Unless otherwise specified, the term electric vehicle is used to refer to both battery electric and plug-in hybrid electricvehicles but does not include fuel cell electric vehicles. For a brief description of the trends related to fuel cell electric vehicles,
see Box 1.3.

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets(Covid-19) pandemic. Seen in comparison to recent years, the annual growth rate
for electric car sales in 2022 was similar to the average rate over 2015-2018, andthe annual growth rate for the global stock of electric cars in 2022 was similar tothat of 2021 and over the 2015-2018 period, showing a robust recovery of EV
market expansion to pre-pandemic pace.

MillionFigure 1.1

Global electric car stock in selected regions, 2010-2022

30
25
20
15
10
5
0
2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

China BEV

China PHEV

Europe BEV

Europe PHEV

United States BEV

United States PHEV

Other BEV

Other PHEV
IEA. CC BY 4.0.

Notes: BEV = battery electric vehicle; PHEV = plug-in hybrid electric vehicle. Electric car stock in this figure refers topassenger light-duty vehicles. In “Europe”, European Union countries, Norway, and the United Kingdom account for over
95% of the EV stock in 2022; the total also includes Iceland, Israel, Switzerland and Türkiye. Main markets in “Other”
include Australia, Brazil, Canada, Chile, Mexico, India, Indonesia, Japan, Malaysia, New Zealand, South Africa, Korea andThailand.
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of suchdata by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in theWest Bank under the terms of international law.
Source: IEA analysis based on country submissions, ACEA, EAFO, EV Volumes and Marklines.

Over 26 million electric cars were on the road in 2022, up 60% relative to 2021 and morethan five times the stock in 2018.

Half of the world’s electric cars are in China

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The increase in electric car sales varied across regions and powertrains, but
remains dominated by the People’s Republic of China (hereafter “China”). In 2022,
BEV sales in China increased by 60% relative to 2021 to reach 4.4 million, and
PHEV sales nearly tripled to 1.5 million. The faster growth in PHEV sales relative
to BEVs warrants further examination in the coming years, as PHEV sales still
remain lower overall and could be catching up on the post-Covid-19 boom only
now; BEV sales in China tripled from 2020 to 2021 after moderate growth over
2018-2020. Electric car sales increased even while total car sales dipped by 3%
in 2022 relative to 2021.

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

China accounted for nearly 60% of all new electric car registrations globally. For
the first time in 2022, China accounted for more than 50% of all the electric carson the world’s roads, a total of 13.8 million. This strong growth results from morethan a decade of sustained policy support for early adopters, including an
extension of purchase incentives initially planned for phase-out in 2020 to the endof 2022 due to Covid-19, in addition to non-financial support such as rapid roll-out
of charging infrastructure and stringent registration policies for non-electric cars.
In 2022, the share of electric cars in total domestic car sales reached 29% in
China, up from 16% in 2021 and under 6% between 2018 and 2020. China has
therefore achieved its 2025 national target of a 20% sales share for so-called newenergy vehicles (NEVs) 3 well in advance. All indicators point to further growth:
although the national NEV sales target is yet to be updated by China’s Ministry ofIndustry and Information Technology (MIIT), which is responsible for the
automotive industry, the objective of greater road transport electrification is reaffirmed in multiple strategy documents. China aims to reach a 50% sales shareby 2030 in so-called “key air pollution control regions”, and 40% across the country
by 2030 to support the national action plan for carbon peaking. If recent market
trends continue, China’s 2030 targets may also be reached ahead of time.
Provincial governments are also supporting adoption of NEVs, with 18 provinces
to date having set NEV targets.
Support at the regional level in China has also helped to advance some of theworld’s largest EV makers. Shenzhen-based BYD has supplied most of the city’selectric buses and taxis, and its leading position is also reflected in Shenzhen’s
ambition of reaching a 60% NEV sales share by 2025. Guangzhou, which has a
50% NEV sales share by 2025 target, facilitated the expansion of Xpeng Motors
to become one of the national EV frontrunners.

NEVs (China) include BEVs, PHEVs and fuel cell electric vehicles.

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Global EV Outlook 2023
Catching up with climate ambitions

ThousandFigure 1.2

Trends and developments in EV markets

Monthly new electric car registrations in China, 2020-2023

800
32%

78%

600

129%

51%
75%

92%

22%

111%
117%
116%

400

175%

2020

2021

2022
BEV

Mar

Jan

Feb

Dec

Oct

Nov

Sep

Jul

Aug

Jun

May

Apr

Mar

Jan

Feb

Dec

Oct

Nov

Sep

Aug

Jul

Jun

Apr

May

Mar

Jan

Feb

Dec

Oct

0

-8%

61%

​

Nov

200

59%
107%

2023

PHEV
IEA. CC BY 4.0.

Note: BEV = battery electric vehicle; PHEV = plug-in hybrid electric vehicle. Percentage labels in 2022-2023 refer to yearon-year growth rates relative to the same month in the previous year.
Source: IEA analysis based on EV Volumes.

Electric car sales in China have been steadily increasing since 2020, but future trends will
warrant further examination given that purchase incentives ended in 2022.

Whether China’s electric car sales share will remain significantly above the 20%
target in 2023 remains uncertain, as sales may have been especially high inanticipation of incentives being phased out at the end of 2022. Sales in January2023 plunged, and while this is in part due to the timing of the Chinese New Year,they were nearly 10% lower than sales in January 2022. However, electric car
sales caught up in February and March 2023, standing nearly 60% above sales in
February 2022 and more than 25% above sales in March 2022, thereby bringing
sales in the first quarter of 2023 more than 20% higher than in the first quarter of2022.

Growth remained steady in Europe despite disruptions
In Europe, 4 electric car sales increased by more than 15% in 2022 relative to 2021
to reach 2.7 million. Sales grew more quickly in previous years: annual growthstood at more than 65% in 2021 and averaged 40% over 2017-2019. In 2022, BEV
sales rose by 30% relative to 2021 (compared to 65% growth in 2021 relative to2020) while PHEV sales dipped by around 3%. Europe accounted for 10% of
global growth in new electric car sales. Despite slower growth in 2022, electric car

Europe includes European Union countries, Iceland, Israel, Norway, Switzerland, Türkiye, and the United Kingdom.

PAGE | 17

IEA. CC BY 4.0.

4Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

sales are still increasing in Europe in the context of continued contraction in car
markets: total car sales in Europe dipped by 3% in 2022 relative to 2021.
The slowdown seen in Europe relative to previous years was, in part, a reflectionof the exceptional growth in electric car sales that took place in 2020 and 2021 in
the European Union, as manufacturers quickly adjusted corporate strategy tocomply with the CO2 emission standards passed in 2019. These standards
covered the 2020-2024 period, with EU-wide emission targets becoming stricter
only from 2025 and 2030 onwards.
High energy prices in 2022 had a mixed impact on the competitiveness of EVs
relative to internal combustion engine (ICE) cars. Gasoline and diesel prices for
ICE cars spiked, but residential electricity tariffs (with relevance for charging) also
increased in some cases. Higher electricity and gas prices also increased
manufacturing costs for both ICE and EV cars, with some carmakers arguing thathigh energy prices could restrict future investment for new battery manufacturing
capacity.

PAGE | 18

IEA. CC BY 4.0.

Europe remained the world’s second largest market for electric cars after China in
2022, accounting for 25% of all electric car sales and 30% of the global stock. The
sales share of electric cars reached 21%, up from 18% in 2021, 10% in 2020 andunder 3% prior to 2019. European countries continued to rank highly for the sales
share of electric cars, led by Norway at 88%, Sweden at 54%, the Netherlands at
35%, Germany at 31%, the United Kingdom at 23% and France at 21% in 2022.
In volume terms, Germany is the biggest market in Europe with sales of 830 000
in 2022, followed by the United Kingdom with 370 000 and France with 330 000.
Sales also exceeded 80 000 in Spain. The share of electric cars in total car sales
has increased tenfold in Germany since before the Covid-19 pandemic, which canin part be explained by increasing support post-pandemic, such as purchase
incentives through the Umweltbonus, and a frontloading of sales in 2022 in
expectation of subsidies being further reduced from 2023 onwards. However, in
Italy, electric car sales decreased from 140 000 in 2021 to 115 000 in 2022, andthey also decreased or stagnated in Austria, Denmark and Finland.

Global EV Outlook 2023
Catching up with climate ambitions

MillionFigure 1.3

Trends and developments in EV markets

Electric car registrations and sales share in selected countries andregions, 2018-2022

12

35%

10

30%
25%

8

20%

6

15%

4

10%

2

5%

Thousand

0

'18

'22

'18

'20
China

'22

'18

'20
Europe

'22

'18

'20
United States

'22

0%

1 000

100%

750

75%

500

50%

250

25%

0

Thousand

'20
World

'18

'20
Norway'22 '18'20
Sweden'22 '18'20
Netherlands'22 '18'20
Germany

'22

0%

400

40%

300

30%

200

20%

100

10%

0

'18
'20
'22 '18
United Kingdom'20France'22 '18BEV'20
CanadaPHEV'22 '18'20'22 '18
South Korea

'20
Japan

'22

0%

Sales share (right)
IEA. CC BY 4.0.

Notes: BEV = battery electric vehicle; PHEV = plug-in hybrid electric vehicle. Passenger light-duty vehicles only. Major
markets at the top. Other countries (middle, bottom) ordered by the share of electric car sales in total car sales. Y-axes do
not have the same scale to improve readability.
Source: IEA analysis based on country submissions, ACEA, EAFO, EV Volumes and Marklines.

Electric car sales exceeded 10 million in 2022, up 55% relative to 2021. Sales in China
increased by 80% and accounted for 60% of global growth. Growth in Europe remained
high (up 15%) and accelerated in the United States (up 55%).

PAGE | 19

IEA. CC BY 4.0.

Sales are expected to continue increasing in Europe, especially following recent
policy developments under the ‘Fit for 55’ package. New rules set stricter CO2
emission standards for 2030-2034 and target a 100% reduction in CO2 emissions
for new cars and vans from 2035 relative to 2021 levels. In the nearer term, anGlobal EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

incentive mechanism operating between 2025 and 2029 will reward
manufacturers that achieve a 25% car sales share of zero- and low-emission cars
(17% for vans). In the first two months of 2023, battery electric car sales werealready up by over 30% year-on-year, while overall car sales increased by justover 10% year-on-year.

The United States confirms return to growth
In the United States, electric car sales increased 55% in 2022 relative to 2021, led
by BEVs. Sales of BEVs increased by 70%, reaching nearly 800 000 andconfirming a second consecutive year of strong growth after the 2019-2020 dip.
Sales of PHEVs also grew, albeit by only 15%. The increase in electric car sales
was particularly high in the United States, considering that total car sales dropped
by 8% in 2022 relative to 2021, a much sharper decrease than the global average(minus 3%). Overall, the United States accounted for 10% of the global growth insales. The total stock of electric cars reached 3 million, up 40% relative to 2021
and accounting for 10% of the global total. The share of electric cars in total car
sales reached nearly 8%, up from just above 5% in 2021 and around 2% between
2018 and 2020.
A number of factors are helping to increase sales in the United States. A greaternumber of available models, beyond those offered by Tesla, the historic leader,helped to close the supply gap. Given that major companies like Tesla andGeneral Motors had already reached their subsidy cap under US support inprevious years, 5 new models from other companies being available means that
more consumers can benefit from purchase incentives, which can be as high as
USD 7 500. Awareness is increasing as government and companies lean towards
electrification: in 2022, a quarter of Americans expect that their next car will beelectric, according to the American Automobile Association. Although charging
infrastructure and driving range have improved over the years, they remain major
concerns for US drivers given the typically long travel distances and lower
popularity and limited availability of alternatives such as rail. However, in 2021 the
Bipartisan Infrastructure Law strengthened support for EV charging, allocating
USD 5 billion in total funding over the 2022-2026 period through the National
Electric Vehicle Infrastructure Formula Program, as well as USD 2.5 billion incompetitive grants over the same period through the Charging and Fueling
Infrastructure Discretionary Grant Program.

Manufacturer caps were still in place for sales taking place in 2022, with models by carmakers having sold over 200 000
EVs losing eligibility for the purchase incentive, even if they were manufactured in North America following requirements
under the IRA. Caps were removed starting from 2023.

PAGE | 20

IEA. CC BY 4.0.

5

Global EV Outlook 2023
Catching up with climate ambitions

ThousandFigure 1.4

Trends and developments in EV markets

Monthly new electric car registrations in the United States, 2020-2023

125
100

42%

75
50

45%

IRA

68%

34%
50%
47%

19%

38%
62%

65%
69%

22%
76%
112%

97%
​

2020

BEV

Mar

Jan

Feb

Dec

Oct

Nov

Sep

Jul

2022

Aug

Jun

Apr

2021

May

Mar

Jan

Feb

Dec

Oct

Nov

Sep

Jul

Aug

Jun

Apr

May

Mar

Jan

Feb

Dec

Oct

0

Nov

25

2023

PHEV
IEA. CC BY 4.0.

Notes: BEV = battery electric vehicle; PHEV = plug-in hybrid electric vehicle; “IRA” refers to the Inflation Reduction Act.
Percentage labels in 2022-2023 refer to year-on-year growth rates relative to the same month in the previous year.
Source: IEA analysis based on EV Volumes.

Monthly sales of electric cars have been steadily increasing in the United States, withfurther growth expected in 2023 as a result of strengthened policy support.

PAGE | 21

IEA. CC BY 4.0.

The acceleration in sales growth could continue in 2023 and beyond thanks torecent new policy support (see Prospects for electric vehicle deployment). The
Inflation Reduction Act (IRA) has triggered a rush by global electromobility
companies to expand US manufacturing operations. Between August 2022 andMarch 2023, major EV and battery makers announced cumulative post-IRA
investments of USD 52 billion in North American EV supply chains, of which 50%
is for battery manufacturing, and about 20% each for battery components and EV
manufacturing. Overall, company announcements including tentative
commitments for US investments for future battery and EV production add up toaround USD 75-108 billion. As an example, Tesla plans to relocate its Berlinbased lithium-ion battery gigafactory to Texas, where it will work in partnershipwith China’s CATL, and to manufacture next-generation EVs in Mexico. Ford alsoannounced a deal with CATL for a battery plant in Michigan, and plans to increaseelectric car manufacturing sixfold by the end of 2023 relative to 2022, at 600 000
vehicles per year, scaling up to 2 million by 2026. BMW is seeking to expand EV
manufacturing at its plant in South Carolina following the IRA. Volkswagen chose
Canada for its first battery plant outside Europe, which will begin operations in
2027, and is also investing USD 2 billion in its plant in South Carolina. While theseinvestments can be expected to lead to high growth in the years to come, theimpact may only fully be seen from 2024 onwards as plants come online.

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

In the immediate term, the IRA has constrained eligibility requirements forpurchase incentives, as vehicles need to be produced in North America in orderto qualify for a subsidy. However, electric car sales have remained strong sinceAugust 2022 (Figure 1.4), and the first months of 2023 have been no exception:
In the first quarter of 2023, electric car sales increased 60% compared to the same
period in 2022, potentially boosted by the January 2023 removal of the subsidy
caps for manufacturers, which means models by market leaders can now benefit
from purchase incentives. In the longer-term, the list of models eligible forsubsidies is expected to expand.

Box 1.1

The 2023 outlook for electric cars is bright

Early indications from first quarter sales of 2023 point to an upbeat market,
supported by cost declines as well as strengthened policy support in key markets
such as the United States. Globally, our current estimate is therefore for nearly
14 million electric cars to be sold in 2023, building on the more than 2.3 million
already sold in the first quarter of the year. This represents a 35% increase inelectric car sales in 2023 compared to 2022 and would bring the global electric sales
share to around 18%, up from 14% in 2022.

MillionElectric car sales, 2010-2023
16
14
12
10
8
6
4
2
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E
China

EuropeUnited States

Other
IEA. CC BY 4.0.

Note: 2023 sales (“2023E”) are estimated based on market trends through the first quarter of 2023.
Source: IEA analysis based on EV Volumes.

PAGE | 22

IEA. CC BY 4.0.

Electric car sales in the first three months of 2023 have shown strong signs ofgrowth compared to the same period in 2022. In the United States, more than
320 000 electric cars were sold in the first quarter of 2023, 60% more than over thesame period in 2022. Our current expectation is for this growth to be sustained
throughout the year, with electric car sales reaching over 1.5 million in 2023,
bringing the electric car sales share in the United States up to around 12% in 2023.

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

In China, electric car sales were off to a rough start in 2023, with January sales
being 8% lower than in January 2022. The latest available data suggests a quick
recovery: over the entire first quarter of 2023, electric car sales in China were morethan 20% higher than in the first quarter of 2022, with more than 1.3 million electriccars being registered. For the remainder of 2023, we expect the generally
favourable cost structure of electric cars to outweigh the effects of the phase-out of
the NEV subsidy. As a result, our current expectation is for electric car sales in
China to be more than 30% higher than in 2022 and reach around 8 million by theend of 2023, reaching a sales share of over 35% (from 29% in 2022).
Based on recent trends and tightening CO2 targets not going into effect until 2025,
the growth of electric car sales in Europe is expected to be the lowest of the threelargest markets. In the first quarter of 2023, electric car sales in Europe increased
by around 10% compared to the same period in 2022. For the full year, we currently
expect electric car sales to increase by over 25%, with one-in-four cars sold in
Europe being electric.
Outside of the major EV markets, electric car sales are expected to reach around
900 000 in 2023 – 50% higher than in 2022. Electric car sales in India in the firstquarter of 2023 are already double what they were in the same period in 2022. In
India and across all regions outside the three major EV markets, electric car sales
are expected to represent 2-3% of car sales in 2023, a relatively small yet growing
share.
There are, of course, downside risks to the 2023 outlook: a sluggish global economy
and the phase-out of subsidies for NEVs in China could reduce 2023 growth inglobal electric car sales. On the upside, new markets may open up more quickly
than anticipated, as persistent high oil prices make the case for EVs stronger in an
increasing number of settings. And new policy developments, such as the April 2023
proposal from the US Environmental Protection Agency (EPA) to strengthen GHG
emissions standards for cars, may send signals that boost sales even before going
into effect.

The number of electric car models rises, especially forlarge cars and SUVs, at the same time as it decreases forconventional cars

PAGE | 23

IEA. CC BY 4.0.

The race to electrification is increasing the number of electric car models available
on the market. In 2022, the number of available options reached 500, up frombelow 450 in 2021 and more than doubling relative to 2018-2019. As in previous
years, China has the broadest portfolio with nearly 300 available models, double
the number available in 2018-2019, prior to the Covid-19 pandemic. This remains
nearly twice as many as in Norway, the Netherlands, Germany, Sweden, France
and the United Kingdom, which all have around 150 models available, more thanGlobal EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

three times as many as before the pandemic. In the United States, there werefewer than 100 models available in 2022, but twice as many as before thepandemic; and 30 or fewer were available in Canada, Japan and Korea.

Available models

Figure 1.5

Car model availability by powertrain, 2010-2022 (left), and breakdown ofavailable cars by powertrain and segment in 2022 (right)
Global availability over time

1 750
1 500

ICE

BEV types in 2022

100%
80%

1 250
1 000

60%

750

40%

500

20%

250
0

2010

2013
BEV

2016
PHEV

2019

2022
ICE

0%
World

China Europe

Small carMedium car

Large car

SUV

USA

World

Crossover
IEA. CC BY 4.0.

Notes: BEV = battery electric vehicle; PHEV = plug-in hybrid vehicle; ICE = internal combustion engine; SUV = sports utility
vehicle; USA = United States. Analysis based on models for which there was at least one new registration in a given year;a model on sale but never sold is not counted, and as such actual model availability may be underestimated. In the charton the right-hand side, distribution is based on the number of available models, not sales-weighted. Small cars include A
and B segments. Medium cars include C and D segments. Crossovers are a type of sports utility vehicle (SUV) built on apassenger car platform. Large cars include E and F segments and multi-purpose vehicles.
Source: IEA analysis based on Marklines.

The number of available electric car models reached 500 in 2022 but remains far below thenumber of ICE options. Large cars and SUVs still account for over half of available BEVs.

PAGE | 24

IEA. CC BY 4.0.

The 2022 trend reflects the increasing maturity of EV markets and demonstrates
that carmakers are responding to increasing consumer demand for electric cars.
However, the number of electric car models available remains much lower thanthat of conventional ICE cars, which has remained above 1 250 since 2010 andpeaked at 1 500 in the middle of the past decade. In recent years, the number of
ICE models sold has been steadily decreasing, at a compound annual growth rateof minus 2% over the 2016-2022 period, reaching about 1 300 models in 2022.
This dip varies across major car markets and is most pronounced in China, where
the number of available ICE options was 8% lower in 2022 than in 2016, versus
3-4% lower in the United States and Europe over the same period. This could
result from contracting car markets and a progressive shift towards EVs amongmajor carmakers. Looking forward, the total number of ICE models available could
remain stable, while the number of new models shrinks, if carmakers focus onelectrification and keep selling existing ICE options rather than increasing budgets
to develop new models.

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

In contrast to ICE models, EV model availability has been growing quickly, at acompound annual growth rate of 30% over the 2016-2022 period. Such growth isto be expected in a nascent market with a large number of new entrants bringing
innovative products to the market, and as incumbents diversify their portfolios.
Growth has been slightly lower in recent years: the annual growth rate stood ataround 25% in 2021 and 15% in 2022. In the future, the number of models can be
expected to continue to increase quickly, as major carmakers expand their EV
portfolios and new entrants strengthen their positions, particularly in emerging
markets and developing economies (EMDEs). The historic number of ICE models
available on the market suggests that the current number of EV options could
double, at least, before stabilising.

Available models

Figure 1.6

Electric car model availability in selected countries by size, 2018-2022

300
250
200
150
100
50
0

'18 '22 '18 '22 '18 '22 '18 '22 '18 '22 '18 '22 '18 '22 '18 '22 '18 '22 '18 '22 '18 '22
China

NorwayNL
SUVGermany Sweden
Large

FranceCrossoverUK

MediumUSA

Canada

Japan

Korea

Small

IEA. CC BY 4.0.
Notes: NL = the Netherlands; UK = United Kingdom; USA = United States; SUV = sports utility vehicle. Includes battery
electric vehicles and plug-in hybrid electric vehicles. Countries are ordered by the number of available models in 2022.
Analysis based on models for which there was at least one new registration in a given year; a model on sale but never soldis not counted, and as such actual model availability may be underestimated.
Source: IEA analysis based on Marklines.

In 2022, 7 countries had around 150 EV models or more available for sale, up from 50 in
2018. The number of large models is increasing more quickly than that of small models.

SUVs and large car models dominate both EV and ICE markets
A major concern for global car markets – both EV and ICE – is the overwhelming
dominance of SUVs and large models among available options. Carmakers areable to generate higher revenues from such models, given higher profit margins,which can cover some of the investments made in developing electric options. In
certain cases, such as in the United States, larger vehicles can also benefit fromless stringent fuel economy standards, hence creating an incentive for carmakers
to slightly increase the vehicle size of a car for it to qualify as a light truck.

PAGE | 25

IEA. CC BY 4.0.

However, large models are more expensive, which poses significant affordability
issues across the board, and all the more so in EMDEs. Large models also haveGlobal EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

implications for sustainability and supply chains, being equipped with larger
batteries that require more critical minerals. In 2022, the sales-weighted average
battery size of small battery electric cars ranged from 25 kWh in China to 35 kWhacross France, Germany and the United Kingdom, and about 60 kWh in the
United States. In comparison, the average for battery electric SUVs was around70-75 kWh in these countries, and within the 75-90 kWh range for large car
models.
Transitioning from ICE to electric is a priority for achieving net zero emissions
targets, regardless of vehicle size, but mitigating the impacts of higher battery
sizes will also be important. In France, Germany and the United Kingdom in 2022,
the sales-weighted average weight of a battery electric SUV was 1.5 times higher
than the average small battery electric car, requiring greater amounts of steel,aluminium and plastic; the battery in the SUV was twice as large, requiring about
75% more critical minerals. The CO2 emissions associated with materials
processing, manufacturing and assembly can be estimated at more than 70%
higher as a result.
At the same time, in 2022, electric SUVs resulted in the displacement of over
150 000 barrels per day of oil consumption and avoided the associated tailpipe
emissions that would have been generated through burning the fuel in combustion
engines. Although electric SUVs represented roughly 35% of all electricpassenger light-duty vehicles (PLDVs) in 2022, their share of oil displacement waseven higher (about 40%), as SUVs tend to be driven more than smaller cars. Of
course, smaller vehicles generally require less energy to operate and lessmaterials to build, but electric SUVs certainly remain favourable to ICE vehicles.
In 2022, ICE SUVs emitted more than 1 Gt CO2, far greater than the 80 Mt net
emissions reductions from the electric vehicle fleet that year. While total car sales
decreased by 0.5% in 2022, SUV sales increased by 3% relative to 2021,
accounting for about 45% of total car sales, with noticeable growth in the
United States, India and Europe. Of the 1 300 available options for ICE cars in
2022, more than 40% were SUVs, compared to fewer than 35% for small andmedium cars. The total number of available ICE options went down from 2016 to
2022, but the drop was only for small and medium cars (down 35%) while largecars and SUVs increased (up 10%).
Similar trends are observed in EV markets. Around 16% of all SUVs sold were
electric in 2022, which is above the overall market share of EVs and demonstrates
consumer preferences for SUVs regardless of whether they are an ICE vehicle or
EV. Nearly 40% of all BEV models available in 2022 were SUVs, which isequivalent to the shares of small and medium car options combined. Other large
models accounted for more than 15%. Just 3 years before, in 2019, small andmedium models accounted for 60% of all available models, and SUVs just 30%.

PAGE | 26

IEA. CC BY 4.0.

In China and Europe, SUVs and large models accounted for 60% of available BEV
options in 2022, on par with the world average. As a comparison, ICE SUVs andlarge models accounted for about 70% of available ICE options in these regions,Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

suggesting that electric cars currently remain somewhat smaller than their ICE
equivalents. Announcements by some major European carmakers indicate that
there could be a greater focus on smaller, more popular models in the years tocome. For example, Volkswagen has announced the launch of a compact modelfor the European market under EUR 25 000 by 2025 and under EUR 20 000 by
2026-2027, as a means to appeal to a broader consumer base. In the
United States, over 80% of available BEV options in 2022 were SUVs or large car
models, which is greater than the share of ICE SUVs or large models at 70%.
Looking ahead, more electric SUVs are to be expected in the United States,
should recent policy announcements on expansion of IRA incentives to more
SUVs be implemented. Following the IRA, the US Treasury has been revisingvehicle classifications, and in 2023 changed the eligibility criteria for clean vehicle
credits relevant to smaller SUVs, which are now eligible if priced under
USD 80 000, up from the previous limit of USD 55 000.

Electric cars remain much cheaper in China
The growth in electric car sales in China has been underpinned by sustained policy
support, but also cheaper retail prices. In 2022, the sales-weighted average priceof a small BEV in China was below USD 10 000. This is significantly less than theprices of small BEVs found in Europe and the United States, where the salesweighted average price exceeded USD 30 000 in the same year.
Sales-weighted average retail price (left) and driving range (right) of BEV
passenger cars in selected countries, by size, in 2022

100 000km

USD (2022)

Figure 1.7

700
600

80 000500
60 000400
300

40 000200
20 000
0

100
0
China

EuropeUnited States

China

Small cars

Medium cars

SUVs and crossovers

EuropeUnited States

Large cars

IEA. CC BY 4.0.
Notes: BEV = battery electric vehicle; SUV = sports utility vehicle. ‘Europe’ is based on data only from France, Germany
and the United Kingdom. Retail prices collected in 2022-2023, before subsidy.
Source: IEA analysis based on EV Volumes.

PAGE | 27

IEA. CC BY 4.0.

In 2022, BEV passenger cars remained much cheaper in China, which explains in parthigher adoption rates there.

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

In China, the best-selling electric cars in 2022 were the Wuling Mini BEV, a small
model priced at under USD 6 500, and BYD’s Dolphin, another small model, below
USD 16 000. Together, these two models accounted for nearly 15% of Chinese
BEV passenger car sales, illustrating the appetite for smaller models. To compare,the best-selling small BEVs across France, Germany and the United Kingdom –Fiat’s 500, Peugeot’s e-208 and Renault’s Zoe – were all priced above
USD 35 000. Few small BEVs were sold in the United States, limited mainly to
Chevrolet’s Bolt and the Mini Cooper BEV, which are priced around USD 30 000.
Tesla’s Y Model was the best-selling BEV passenger car in both the selected
European countries (priced at more than USD 65 000) and the United States(more than USD 50 000). 6
Chinese carmakers have focused on developing smaller and more affordable
models in advance of their international peers, cutting down costs following years
of tough competition domestically. Hundreds of small EV manufacturers haveentered the market since the 2000s, benefitting from a variety of public support
schemes, including subsidies and incentives for both consumers andmanufacturers. The majority of these firms went bankrupt due to competition as
subsidies were gradually phased out, and the market has since consolidated
around a dozen frontrunners, which have succeeded in developing small andcheap electric cars for the Chinese market. Vertical integration of battery and EV
supply chains from mineral processing to battery and EV manufacturing, as well
as cheaper labour, manufacturing and access to finance across the board, havealso contributed to developing cheaper models.
Meanwhile, carmakers in Europe and the United States – both early developers
such as Tesla and incumbent major manufacturers – have mostly focused onlarger or more luxurious models to date, hence offering few options affordable formass-market consumers. However, the small options available in these countries
typically offer greater performance than those in China, such as longer driving
range. In 2022, the sales-weighted average range of small BEVs sold in the
United States was nearly 350 km, while in France, Germany and theUnited Kingdom it was just under 300 km, compared to under 220 km in China.
For other segments, the differences are less significant. The broader availabilityof public charging points in China may, in part, explain why consumers there havebeen more willing to opt for lower driving ranges than their European or Americancounterparts.
In 2022, Tesla heavily reduced the price of its models on two occasions ascompetition increased, and many carmakers have also announced cheaper
options in the coming years. While these announcements warrant further
examination, this trend could indicate that the price gap between small electriccars and incumbent ICE options could progressively close during this decade.

PAGE | 28

IEA. CC BY 4.0.

6
However, Tesla has decreased car prices several times since the publication of the IRA in the United States, in part to boost
sales as competition gets tougher (see section on corporate strategy and finance).

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

Emerging markets see encouraging growth
China, Europe and the United States – the three major markets for electric cars –accounted for about 95% of global sales in 2022. Emerging market and developing
economies (EMDEs) outside China account for only a fraction of the global electric
car market. Demand for electric cars has increased in recent years, but sales remain
low.
While EMDEs often quickly adopt low-cost emerging technology products(e.g. smartphones, computers and connected devices), electric cars remain
typically too expensive for the majority of the population. According to a recent
survey, over 50% of Ghanaian respondents would prefer to purchase an EV to an
ICE vehicle, but more than half of those potential consumers would not be willing tospend more than USD 20 000 for an electric car. Lack of access to reliable andaffordable charging can be a barrier, as can limited access to EV servicing,
maintenance and repair. In most EMDEs, road transport remains largely based on
smaller mobility solutions in urban centres, such as two- and three-wheelers, whichhave seen much greater success in terms of electrification, as well as sharedmobility for regional commutes. Purchasing behaviour is also different, with lower
personal car ownership rates and more common purchase of used cars. Looking
forward, while sales of electric cars – both new and used – can be expected toincrease in EMDEs, it is likely that many countries will continue to rely primarily on
two- and three-wheelers (see subsequent section on these vehicles in this report).
There was a notable boom in electromobility in 2022 in India, Thailand andIndonesia. Collectively, sales of electric cars in these countries more than tripled
relative to 2021, reaching nearly 80 000. Sales in 2022 were 7 times higher than in
2019, before the Covid-19 pandemic. In contrast, sales in other EMDEs were lower.
In India, BEV sales reached nearly 50 000 in 2022, 4 times more than in 2021, while
total car sales increased by just below 15%. Leading domestic manufacturer Tataaccounted for over 85% of BEV sales, including through sales of its small BEV
Tigor/Tiago, which quadrupled. Indian PHEV sales remained close to zero.
Burgeoning electromobility companies are now betting on the government’s
Production Linked Incentive (PLI) scheme – with around USD 2 billion in subsidy
programmes – to ramp up EV and component manufacturing. This scheme has
attracted investments totalling USD 8.3 billion.

PAGE | 29

IEA. CC BY 4.0.

The Indian market, however, currently remains geared towards shared and smaller
mobility. In 2022, 25% of electric car purchases in India were by fleet operators,
such as for taxis. In early 2023, Tata secured a large order from Uber for
25 000 electric cars. Furthermore, while 55% of three-wheelers sold were electric,
fewer than 2% of cars sold were EVs. Ola, India’s top EV company by revenue,
does not yet offer electric cars. Ola is instead concentrating on smaller mobility andaims to double its electric two-wheeler manufacturing capacity to 2 million by theend of 2023, and to reach an annual production capacity of 10 million between 2025
and 2028. The company also seeks to build lithium-ion battery manufacturing
facilities, initially at 5 GWh capacity, scaling up to 100 GWh by 2030. Ola aims tostart marketing electric cars for its taxi business by 2024 and to make its fleet of

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

taxis fully electric by 2029, while launching its own electric car business for both thehigh-end and mass markets. It announced over USD 900 million of investments forbattery and EV manufacturing in Southern India, and an increase in annual
production from 100 000 to 140 000 vehicles.

100

40

80

30

60

20

40

10

20

'18

'20
India

'22

'18

'20
Thailand

'22

'18

'20
Indonesia

'22

0

50

100

40

80

30

60

20

40

10

20

0

'18

'20
Africa'22 '18'20
Asia (other)'22 '18'20'22 '18'20'22
Central Europe, West
Latin America andAsia, Middle East
Caribbean

BEV - GEF
BEV
Small and medium models (right)

Models (count)

50

0

Sales (thousand)Electric car sales by powertrain (columns) and available models by car
size (lines) in selected regions, 2018-2022

Models (count)

Sales (thousand)Figure 1.8

0

PHEV - GEF
PHEV
Large models (right)
IEA. CC BY 4.0.

Notes: BEV = battery electric vehicle; PHEV = plug-in hybrid electric vehicle. “GEF” refers to the Global Environment Facility’s
Global E-Mobility Programme, which was launched in 2019 and supports 27 countries in their shift to electromobility. In Africa,
GEF includes Burundi, Côte d'Ivoire, Madagascar, Seychelles, Sierra Leone, South Africa, Togo, and Tunisia. In Asia, GEF
includes Bangladesh, India, Indonesia, Maldives, Philippines, and Sri Lanka, but India and Indonesia are shown separately. In
Central Europe, West Asia and Middle East, GEF includes Albania, Armenia, Jordan, Ukraine and Uzbekistan. In Latin
America and Caribbean, GEF includes Antigua and Barbuda, Chile, Costa Rica, Ecuador, Grenada, Jamaica, Peru and St
Lucia. Other countries in Africa include: Algeria, Egypt, Ethiopia, Ghana, Kenya, Mauritius, Morocco, Nigeria, Rwanda, Zambia
and Zimbabwe. Other countries in Asia include: Cambodia, Fiji, Laos, Malaysia, Mongolia, Nepal, Pakistan, Thailand and Viet
Nam. Other countries in Central Europe, West Asia, Middle East include Azerbaijan, Bahrain, Belarus, Bosnia, Georgia, Iraq,
Kazakhstan, Kosovo, Kuwait, Lebanon, Moldova, North Macedonia, Oman, Qatar, Russia, Saudi Arabia, Serbia and theUnited Arab Emirates. Other countries in Latin America and Caribbean include Argentina, Bahamas, Bolivia, Brazil, Colombia,
Dominican Republic, Panama, Paraguay and Uruguay. The number of available models refers to unique models across theselected sample of countries. The number of available models includes BEVs and PHEVs.
Source: IEA analysis based on EV Volumes.

PAGE | 30

IEA. CC BY 4.0.

Electric car sales continue to increase in emerging markets with a notable boom in India,
but they remain low relative to major markets, and model availability is still an issue.

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

In Thailand, electric car sales doubled to 21 000, equally distributed between
BEVs and PHEVs. The emerging presence of Chinese carmakers has accelerated
EV adoption in the country. In 2021, Chinese original equipment manufacturer(OEM) Great Wall Motors launched its Ora Good Cat BEV model in the Thai
market, and in 2022 it became the most sold electric car in Thailand, with nearly
4 000 sales. The second and third best-selling cars were also Chinese,manufactured by Shanghai Automotive Industry Corporation (SAIC), none ofwhich were sold in the country in 2020. Chinese automakers were able to undercut
EV prices from foreign competitors also present in the Thai market, such as BMW
and Mercedes, thereby appealing to a broader consumer base. In addition, theThai government offers various financial incentives for electric cars, including
subsidies, excise duty waivers and import tax reductions, which have contributed
to making electric cars more attractive. Tesla is planning to enter the Thai market
in 2023 along with building Superchargers.
In Indonesia, BEV sales multiplied by more than 14, exceeding 10 000, while
PHEV sales remained close to zero. In March 2023, Indonesia announced new
incentives to support sales of electric two-wheelers, cars and buses, with the aimof strengthening domestic capacity in EV and battery manufacturing through local
component requirements. The government aims to subsidise the sale of 200 000
electric two-wheelers and 36 000 electric cars in 2023, reaching a sales share of
4% and 5% respectively. The new subsidies could reduce the price of an electric
two-wheeler by 25-50% to help compete against ICE equivalents. Indonesia plays
an important role in EV and battery supply chains, in particular given its abundant
raw mineral resources and status as the world’s largest nickel miner. This has
attracted investment from global companies, and Indonesia could become thelargest manufacturing hub in the region for batteries and components.
Model availability remains an issue in EMDEs, with many of the options on saleheavily geared towards the higher end, such as SUVs, large and luxury models.
While the trend for SUVs is global, purchasing power is more limited in EMDEs,
making such vehicles largely unaffordable. Across the different regions
considered in this section of the report, for a total of more than 60 EMDEs,
including those which receive support from the Global Environment Facility’s(GEF) Global E-Mobility Programme, there were two to six times more large
models available than small ones in 2022.

PAGE | 31

IEA. CC BY 4.0.

In Africa, the best-selling electric car model in 2022 was the Hyundai Kona, acrossover BEV, and there were about as many recorded sales of Porsche’s large
and expensive Taycan BEV as there were of Nissan’s medium-sized Leaf BEV.
There were also eight times more sales of electric SUVs than of the Mini Cooper
SE BEV and Renault Zoe BEV combined, the two best-selling small electric cars.
In India, the best-selling electric car model was Tata’s crossover Nexon BEV, withover 32 000 sales, or three times more than the second best-selling model, Tata’s

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

small Tigor/Tiago BEV. Across all of the EMDEs considered here, sales of electric
SUVs reached 45 000, which is more than the sales of small (23 000) and medium(16 000) electric cars combined. In Costa Rica, the leading country in Latin
America in terms of BEV sales share, only 4 models in the top 20 were not SUVs,
and nearly a third were luxury models. The future of mass-market electrification in
EMDEs relies on the development of smaller, more affordable electric cars,alongside two- and three-wheelers.

Box 1.2

On the distinction between vehicle registrations and vehiclesales

An important distinction for assessing the evolution of vehicle markets is thedifference between registrations and sales. New registrations represent the numberof vehicles that have been officially registered for the first time with the relevant
government ministry or insurance agency, including domestically produced andimported vehicles. Sales can either refer to vehicles sold by dealers or agencies(retail sales), or to vehicles sold to dealers by vehicle manufacturers (factory
shipments, i.e. including exports). The choice of metric can make a significant
difference when analysing vehicle markets. For consistency in accounting acrossall countries, and to avoid double-counting at a global level, in this report vehicle
market sizes are based on new vehicle registrations, where available, and retailsales otherwise, not on factory shipments.
China’s vehicle market trends in 2022 are a good illustration of why this matters. In
2022, an increase of 7 to 10% in factory shipments (reported as sales) for the
Chinese passenger car market was reported, while insurance registrations showeda stagnation of the domestic market in the same year. This increase was observedin data from the China Association of Automobile Manufacturers (CAAM), which is
the official data source for China’s car industry. CAAM data is collected from car
manufacturers and represents factory shipments. Another widely referenced sourceis the China Passenger Car Association (CPCA), a non-governmental organisationthat provides wholesale, retail sales and exports for passenger cars, but is not
qualified to provide national statistics, and it does not cover all OEMs, whereas
CAAM does. The China Automotive Technology and Research Center (CATARC)
is a state-owned think tank, and collects car production numbers from vehicle
identification numbers and car sales numbers from vehicle insurance registrations.
In China, vehicle insurance is registered for the vehicle itself and not for theindividual driver, and is therefore useful for tracking the number of vehicles on theroad, including imports. The main differences between CATARC data and the othersources stem from exports and military or other cars that do not get registered, andinventory stocks of vehicle manufacturers.

PAGE | 32

IEA. CC BY 4.0.

In 2022 the total exports of passenger cars increased rapidly, making thedifferences between these data sources more apparent. In 2022 the export ofGlobal EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

passenger vehicles increased by almost 60%, exceeding 2.5 million, while theimports of passenger vehicles decreased by almost 20% (950 000 to 770 000).
Similar discrepancies between factory shipments and insurance registrations areapparent in the Chinese bus and truck (commercial vehicle) market. In both 2021
and 2022, total volumes of factory shipments were substantially higher thaninsurance registrations, implying net export shares of commercial vehicles of about
9% in 2021 and more than 13% in 2022.

Passenger cars [thousand]Number of passenger car (top) and commercial vehicle (bottom) sales andregistrations in China reported by various sources, 2020-2022
25 000
20 000
15 000
10 0005 000

Buses and trucks [thousand]

0

2020

2021
CAAM

2022

2020

2021
CPCA

2022

2020
2021
2022
Insurance registrations

6 000
5 000
4 000
3 000
2 000
1 000
0

2020

Exported NEVs

2021
CAAM

2022

Exported non-NEVs

2020

NEVs

2021
Insurance registrations

non-NEVs

2022*

NEVs + non-NEVs

IEA. CC BY 4.0.
*Insurance registrations of commercial vehicles from EV100 and from EVI member country data submissions. Note:
CAAM = China Association of Automobile Manufacturers; CPCA = China Passenger Car Association; NEV = new energy
vehicle.
Sources: IEA analysis based on sales data from CAAM and CPCA and insurance registrations of new passenger
vehicles from Dongchedi. CAAM: Includes exports, exclude imports (CAAM, 2023), CPCA: Excludes exports and imports(CPCA, 2023).

Sales of electric light commercial vehicles continue toincrease, catching up with electric car sales

PAGE | 33

IEA. CC BY 4.0.

Electric light commercial vehicle (LCV) sales worldwide nearly doubled in 2022
relative to 2021 to more than 310 000 vehicles, even as overall LCV sales declinedby more than 10% (Figure 1.9). At a global level, the electric LCV sales share isGlobal EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

3.6%, about one-quarter that of passenger cars. Current trends indicate that theelectric LCV market is catching up with that of electric cars, suggesting that the
gap in terms of EV sales shares could narrow in the future. For the first time in
2022, the increase in the share of electric LCVs outpaced that of electricpassenger cars (albeit from a low base). This demonstrates that once a criticaltipping point in terms of favourability of total cost of ownership (TCO) has beenachieved, commercial vehicle purchasers are likely to respond more rapidly toeconomic fundamentals than private consumers. Commercial vehicle owners
typically use their vehicles more intensively, and as they have an imperative tomaximise profit, EVs provide an opportunity to considerably reduce operating
costs. The experience of commercial owners can also provide learnings for theprivate consumers segment: better fleet and charging management could help
address concerns over range limitations.
The share of PHEVs in LCVs has remained very low; around 98% of both electric
LCV sales and stock in 2022 were BEVs. It is likely that this reflects the economic
favourability of the battery electric powertrain – as opposed to plug-in hybrids – incommercial operations characterised by intensive usage, regularity andpredictability (in terms of driving range, geographic extent, and return-to-base forovernight charging), as well as the lower maintenance and service costs of battery
electric LCVs. Battery electric LCV adoption may also be spurred on by thecontinuing expansion of low- and zero-emission zones.

ThousandFigure 1.9

Electric light commercial vehicle sales and sales shares, 2018-2022

350

35%

300

30%

250

25%

200

20%

150

15%

100

10%

50

5%

0

'18

'20
World
BEV

'22 '18
PHEV

'20
China

'22 '18'20
EuropeElectric LCV sales share (right)'22 '18

'20
Korea

'22

0%

Electric car sales share (right)
IEA. CC BY 4.0.

Notes: BEV = battery electric vehicle; PHEV = plug-in hybrid vehicle; LCV = light commercial vehicle. Electric car sales
shares are provided as a point of comparison.

PAGE | 34

IEA. CC BY 4.0.

Sales of electric LCVs nearly doubled in 2022, reaching 3.5% of total LCV sales, led by
Korea, Norway and China.

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

In 2022, China led in terms of overall electric LCV sales with over 130 000 units
sold, and nearly 15% of LCVs sold being electric. 7 Subsidies for battery electricand fuel cell trucks and vocational vehicles (including LCVs) have decreased inrecent years, but overall zero-emission commercial truck sales have been growing
since 2020, even as subsidies per vehicle have declined, indicating the increasing
commercial competitiveness of electric trucks.
In terms of market share, Korea continued to lead in 2022 with 27% of LCV sales
being electric (36 000 vehicles), but sales growth in 2022 slowed to half its levelin the previous year. This may be due to changes to the subsidy scheme for LCVs
and to the repealing in April 2022 of a policy that made obtaining commercial
registration permits easier for electric LCVs than ICE models (see Policy
developments and corporate strategy).
Light commercial EV sales shares also grew substantially in the Nordic countries,
with Norway reaching 25%, Iceland 16%, and Sweden 13%. In all other key
European and North American national markets, shares are lower than 10%, andtypically less than the global average of 3.5%, but the rate of growth in market
share for electric LCVs was higher than for passenger light-duty vehicles (PLDVs)(albeit from a lower baseline) across most leading EV markets, including theUnited States, Japan, and the European Union.

Electric two-wheeler sales declined in China while global
electric three-wheeler sales continued to rise
Global electric two-wheeler sales totalled about 9.2 million in 2022, a drop ofnearly 18% from 2021 (Figure 1.10). This drop is almost entirely attributable to thedip in sales of electric mopeds and motorcycles in China, which fell from
10.2 million in 2021 to under 7.7 million in 2022, even as the overall two-wheeler
market there continued to grow. Supply chain challenges stemming from China’s
pandemic-related restrictions in 2022 hit the electric two-wheeler market
particularly hard, and in spite of growth in sales of premium domestic and imported
two-wheelers (e.g. from BMW, Ducati and others), the overall sales share ofelectric two-wheelers dipped back below 50%. 8 Despite the decline in sales, China
Commercial truck sales in China are reported according to four gross vehicle weight (GVW) bins: less than 1.8 tonnes, 1.86 tonnes, 6-14 tonnes, and greater than 14 tonnes. These are reallocated to categories based on other external data sources
to match IEA’s harmonised global definitions of light commercial vehicles (less than 3.5 tonnes GVW), medium trucks (3.515 tonnes), and heavy trucks (15 tonnes GVW and above).
8
As with other vehicle types, tracking new two-wheeler registrations (“sales”) in China is difficult, as the official data source,
CAAM, tracks factory shipments, and hence reports volumes that include exported vehicles. Tracking is particularly difficultin the case of electric two-wheelers, however, as many data sources include pedal-electric bicycles and other small electricmopeds (see, for instance, a recent industry report from Honda). Chinese data sources give vehicle sales of electric twowheelers at around 50 million in 2021, and 60 million in 2022, of which about 7.6 million are classified as motorcycles (China
Chamber of Commerce for Motorcycles). Some of these attain top speeds of less than 50 km/hour, and so are excluded fromthe above figures. In India, electric bicycles and mopeds with a top speed of less than 50 km/hour made up more than 80%of the market in 2021 and 2022. The accounting here includes only vehicles with a minimum top speed of 50 km/hr and that
fit the UNECE definition of L1 or L3, based on data provided by MotorcyclesData.com.

PAGE | 35

IEA. CC BY 4.0.

7

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

continued to dominate the electric two-wheeler market in terms of size, accounting
for nearly 85% of global sales.
Electric two-wheelers also lost market share in Viet Nam, despite sales shares ofdomestically produced electric two-wheelers having increased considerably inrecent years. In terms of absolute volumes, sales grew in most Asian markets
outside China and Viet Nam.
Figure 1.10 Electric two- and three-wheeler sales and sales share by region, 20162022
60%Electric two-wheelers

Electric two-wheelers (millions)

12
10
8
6
4

50%
40%
30%
20%
10%

2

0%
2016

0
2016 2017 2018 2019 2020 2021 2022

2018

2019

2020

2021

2022

2017

2018

2019

2020

2021

2022

80%

Electric three-wheelers

Electric three-wheelers (100 000s)

12

2017

10
8
6
4

70%
60%
50%
40%
30%
20%

2

10%

0
2016 2017 2018 2019 2020 2021 2022

0%
2016

China

Viet Nam

EuropeDeveloping Asia

Latin America

North America

India
IEA. CC BY 4.0.

Source: IEA analysis based on country submissions and data from MotorcyclesData.com.

PAGE | 36

IEA. CC BY 4.0.

China leads global electric two-wheeler sales, despite a 25% drop in 2022. Battery leasing
business models and stronger manufacturing boost Indian electric three-wheeler sales.

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

India leads on sales of electric three-wheelers thanks to policy
support and innovative business models
Sales of electric three-wheelers, which play an important role in urban mobility inIndia for both cargo and passenger services, soared to 425 000 units in 2022.
Sales have been strong in India for a number of years, with hundreds of thousandsof electric three-wheelers sold every year since 2012, with the exception of 2020,
when the Covid-19 pandemic reduced sales volumes to 30% of the previous year.
Over half of India’s three-wheeler registrations in 2022 were electric,
demonstrating their growing popularity due government incentives and lower
lifecycle costs compared with conventional models, as well as higher fuel prices.
IEA analysis on the TCO in India suggests that electric three-wheelers are already70% cheaper than their gasoline-power ICE equivalents over their lifetime (IEA,
forthcoming).
Policies including the purchase incentives under FAME II, supply-side incentives
under the PLI scheme, tax benefits and India’s Go Electric campaign allcontributed to reducing the higher upfront costs (see Policy developments andcorporate strategy for a detailed discussion of these and other policies). A total of
15 Indian states have already adopted EV policies to promote stronger EV
deployment (and many more are drafting them), the majority of which include
additional demand incentives. Bulk procurement schemes, the emergence of thebattery-as-a-service (BaaS) business model and India’s draft battery swapping
policy all give further impetus to the rapidly rising sales of electric three-wheelers.
China followed India in terms of electric three-wheeler sales, with nearly 350 000
units sold in 2022. Together, China and India accounted for nearly 99% of global
electric three-wheeler sales.

Box 1.3

Korea continues to lead fuel cell electric car growth

In 2022, the stock of fuel cell electric vehicles (FCEVs) increased 40% compared
to 2021, reaching over 72 000 vehicles globally. About 80% of the FCEVs are cars,
10% trucks and almost 10% buses. In 2022, the fuel cell truck segment grew at afaster rate than cars and buses, increasing 60%.
Korea is now home to over half of all fuel cell cars globally. Two-thirds of theadditional 15 000 fuel cell cars that hit the road in 2022 were in Korea. This can be
attributed in part to a policy landscape that supports FCEV production and sales,
which has also led to Hyundai being the top fuel cell automaker.

PAGE | 37

IEA. CC BY 4.0.

The United States holds the second largest FCEV stock, with over 15 000 FCEVs.
Most of these are fuel cell cars, with a little more than 200 fuel cell buses. In 2022,

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

the stock of FCEVs in the United States increased more than 20%, which is muchless than the 60% growth in China, which has the third largest FCEV stock.
Historically, China has dominated the heavy-duty fuel cell vehicle segments (trucks
and buses). This is still the case in 2022, with China home to over 95% of the
global fuel cell truck fleet and almost 85% of the global fuel cell bus fleet. However,in 2022, China added over 200 fuel cell cars to its FCEV fleet after years of only
deploying buses and trucks.
For further details on the status of FCEVs and other hydrogen-based applications,see the IEA Global Hydrogen Review report series.
Fuel cell electric vehicle and hydrogen refuelling station stock by region,
2022
Share of FCEV and HRS stock by region, 2022
1 020

72 100Thousand

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

FCEV stock by region and mode, 2022
70
60
50
40
30
20
10
0

FCEVs

Korea

HRS
United States

China

Japan

PLDVs
LCVs
Germany
RoW

Buses

TrucksIEA. CC BY 4.0.
Notes: FCEVs = fuel cell electric vehicles; HRS = hydrogen refuelling station; PLDVs = passenger light-duty vehicles;
LCVs = light commercial vehicles; RoW = rest of the world.
Source: IEA analysis based on the data submission of the Advanced Fuel Cells Technology Collaboration Program.

Electric heavy-duty vehicles
Electric truck and bus sales shares
In 2022, nearly 66 000 electric buses and 60 000 medium- and heavy-duty trucks
were sold worldwide, representing about 4.5% of all bus sales and 1.2% of trucksales worldwide. China continues to dominate production and sales of electric(and fuel cell) trucks and buses. In 2022, 54 000 new electric buses and an
estimated 52 000 electric medium- and heavy-duty trucks 9 were sold in China,
representing 18% and 4% of total sales in China and about 80% and 85% of global

PAGE | 38

IEA. CC BY 4.0.

9
Commercial truck sales in China are reported according to four GVW bins: less than 1.8 tonnes, 1.8-6 tonnes, 6-14 tonnes,
and greater than 14 tonnes. These are reallocated to categories based on other external data sources to match IEA’s
harmonised global definitions of light commercial vehicles (less than 3.5 tonnes GVW), medium trucks (3.5-15 tonnes), andheavy trucks (15 tonnes GVW and above).

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

sales, respectively. In addition, many of the buses and trucks being sold in Latin
America, North America and Europe are Chinese brands.
Figure 1.11 Electric bus and truck registrations and sales share by region, 2015-2022

25%

80

20%

60

15%

40

10%

20

5%

0

2016

2018

2020
Other

2022

Thousand registrations

100

Sales share (dots)

Thousand registrations

30%

0%

90

4.5%

80

4.0%

70

3.5%

60

3.0%

50

2.5%

40

2.0%

30

1.5%

20

1.0%

10

0.5%

0

United States

2016

2018
Europe

2020

2022
China

Sales share (dots)

Trucks

Buses
120

0.0%

IEA. CC BY 4.0.
Source: IEA analysis based on country submissions and data from EV100 and vehicle insurance registration data.

China continues to account for about 80% of global electric bus sales and 85% of electrictruck sales, as well as exporting large volumes of both.

Within Europe, the sales share for electric buses was highest in Finland, where
electric buses made up two-thirds of sales in 2022, Norway and the Netherlands,
where they made up nearly half of sales, and Denmark, where they made up
nearly one-third. Sales shares were also high in Sweden, Switzerland and Israel.
Electric trucks sales shares remain low across most major markets. With the
exception of China, cumulative electric medium- and heavy-duty truck (“truck”)
sales to date number in the hundreds in most countries (just under 2 000 electrictrucks were sold across the entire European Union in 2022). Sales shares
generally remain well under 1% in medium- and heavy-duty segments, with major
shipping logistics companies running demonstrations of electric trucks in regional
and long-haul electric operations.

PAGE | 39

IEA. CC BY 4.0.

The average declared range of electric trucks produced in China exceeded
300 km, and that of electric buses 400 km. A growing number of electric buses
have ranges that enable intercity operations; the vast majority of electric buses in
China (and elsewhere) are currently used in urban public transit operations, but
official statistics show that at least 8% of new energy buses are operating on
intercity routes.

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

The majority of electric trucks sold in China are box trucks, 10 and 90% of electrictruck sales were under 4.5 tonnes in gross vehicle weight (GVW), with the majorityof these being between 3.5-4.5 tonnes. Electric truck sales for tractor-trailers andgarbage trucks in China have also grown rapidly from a low base.
Until the past few years, the production and sales volumes of electric buses andtrucks ebbed and flowed based on subsidies. The central government introduced
subsidies totalling nearly CNY 30 billion (Chinese Yuan renminbi)(USD 4.3 billion) in 2016 and 2017, the vast majority of which went to electricbuses; BYD buses alone received about CNY 10 billion (USD 1.5 billion). Despite
a progressive reduction in subsidies from 2018 onwards (total subsidies from2018-2021 were less than CNY 20 billion [USD 2.9 billion]), electric bus and trucksales began increasing in 2021 and grew again in 2022, a promising sign that they
have reached cost and performance metrics that make them increasinglycompetitive without government support. Cost reductions are also being driven bymarket consolidation and economies of scale. Indeed, China's commercial electrictruck sales (including both LCVs and medium- and heavy-duty trucks – see section
above on electric LCVs) dipped from a high of nearly 150 000 in 2017 (immediately
following the adoption of the subsidy) to a low point in 2020, at 59 000; before
rebounding to reach 186 000 total electric truck sales in 2022, despite declining
subsidies on a per-vehicle basis in both 2021 and 2022.

Zero-emission vehicle model availability expanded in
2022 in the medium- and heavy-duty truck segments
The number of models on offer for zero-emission trucks has continued to expandin 2022, with nearly 840 current and announced medium- and heavy-duty vehicle
models in the Global Drive to Zero Emission Technology Inventory (ZETI)
database.
The trend of new model development has shifted from buses to medium- andheavy-duty trucks. Of the 220 models that became available in 2022, more thanhalf were either medium-duty trucks (over 60 models) or heavy-duty trucks (over50 models), reflecting the fact that truck manufacturers are increasingly gaining
confidence in supplying larger, heavier zero-emission models with greater
payloads. The majority (over 90%) of the already available medium-duty andheavy-duty trucks models are battery electric; 12 models of fuel cell heavy-duty
trucks are currently available – and another 8 are due to become available in 202324.
Of commercially available bus and truck models in 2022, 60% (over 500 models)
were produced by OEMs headquartered in China. Another 20% (over 170 models)
were produced by North American OEMs, and 15% (over 120 models) by
European OEMs.

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IEA. CC BY 4.0.

10
Box trucks are light commercial and medium-duty chassis cab trucks with an enclosed box-shaped cargo space in theback.

Global EV Outlook 2023

Trends and developments in EV markets

Figure 1.12 Current and announced zero-emission commercial vehicle models by type, release date and range, 2019-2023

IEA. CC BY 4.0.

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IEA. CC BY 4.0.

Notes: Although the inventory is continuously updated, this snapshot may not be fully comprehensive due to new model announcements and small manufacturers not yet captured in theinventory. Zero-emission vehicles (ZEVs) include battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs) and fuel cell electric vehicles (FCEVs). “Other” includes garbage,
bucket, concrete mixer, mobile commercial and street sweeper trucks. The heavy-duty truck and transit bus figures include announced models for 2023-2024.
Source: IEA analysis based on the Global Drive to Zero ZETI tool database.

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

China dominates heavy-duty battery production
European and North American electric bus and truck makers rely heavily on Asian
battery makers. Given their dominance in lithium iron phosphate (LFP) battery
chemistries, China’s CATL produces the vast majority of batteries for trucks.
However, spurred on by industrial policies – the European Union’s Green
Industrial Plan and the United States’ IRA – truck makers have already begun tobuild or are announcing investments in new production facilities for heavy-duty
battery packs (such as Volvo’s 2.7 GWh plant, which opened in Sweden in 2022).
Truck makers have also entered collaborations with major cell makers, seeking tosecure further opportunities for vertical integration.
More than 95% of heavy-duty trucks produced in China were equipped with LFP
cathode chemistries in 2021. The durability and lower cost of LFP batteries makethem the preferred choice not only because of the high lifetime mileage needed
for commercial operations, but also because price is a concern for bus and truck
buyers: over half of truck purchases are leases or rely on loans.
The battery capacity of currently available commercial and announced models
included in the ZETI database within a given vehicle type generally correlates withdeclared vehicle range (Figure 1.12). Table 1 shows how average battery capacity
has generally increased across most bus categories from 2019 to 2022. However,no such clear trend is apparent across coaches or truck categories.
Average battery capacity in medium- and heavy-duty vehicle models
Vehicle Category

Average Battery Capacity (kWh)
2019

2020

2021

2022

Change 20192022

Transit bus

264

322

225

345

31%

School bus

155

141

207

137

-12%

Shuttle bus

104

119

120

150

45%

Coach

316

347

233

266

-16%

Cargo van

69

90

57

60

-13%

Medium-duty step van

--

134

155

163

22%*

Medium-duty truck

124

139

99

92

-26%

Heavy-duty truck

293

232

372

311

6%

Yard tractor

150

184

160

197

31%

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IEA. CC BY 4.0.

* Change from 2020 to 2022 average, as no medium-duty step vans were sold in 2019.
Source: IEA analysis based on the Global Drive to Zero ZETI tool database.

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

Actual vehicle range depends on the loaded vehicle weight, duty cycle,
aerodynamics and drivetrain efficiency, as well as environmental factors such astemperature. In addition, as no harmonised test procedure currently exists tomeasure electric range for medium- and heavy-duty vehicles in any of the major
markets where deployment of electric trucks has begun, manufacturers candetermine their own methods to declare the electric range of the commerciallyavailable and announced models. However, any standardised test procedure
would need to consider complicated issues of non-motive energy consumption(e.g. heating ventilation and air conditioning in buses, cooling in refrigerated
trucks), as well as the potential for buses and trucks to be used in vehicle-to-grid
applications (as has been demonstrated, for instance, with electric school busesin the United States). In light of such considerations, a first regulatory step could
be to mandate that electric medium- and heavy-duty vehicle makers measure anddisclose the usable battery energy according to a yet-to-be-developed
standardised measurement procedure.

Charging infrastructure
Public charging points are increasingly necessary toenable wider EV uptake
While most of the charging demand is currently met by home charging, publicly
accessible chargers are increasingly needed in order to provide the same level ofconvenience and accessibility as for refuelling conventional vehicles. In dense
urban areas, in particular, where access to home charging is more limited, publiccharging infrastructure is a key enabler for EV adoption. At the end of 2022, there
were 2.7 million public charging points worldwide, more than 900 000 of whichwere installed in 2022, about a 55% increase on 2021 stock, and comparable tothe pre-pandemic growth rate of 50% between 2015 and 2019.

Slow chargers
Globally, more than 600 000 public slow charging points 11 were installed in 2022,
360 000 of which were in China, bringing the stock of slow chargers in the country
to more than 1 million. At the end of 2022, China was home to more than half ofthe global stock of public slow chargers.
Europe ranks second, with 460 000 total slow chargers in 2022, a 50% increase
from the previous year. The Netherlands leads in Europe with 117 000, followed
by around 74 000 in France and 64 000 in Germany. The stock of slow chargers
Slow chargers have power ratings less than or equal to 22 kW. Fast chargers are those with a power rating of more than
22 kW and up to 350 kW. “Charging points” and “chargers” are used interchangeably and refer to the individual charging
sockets, reflecting the number of EVs that can charge at the same time. ‘’Charging stations” may have multiple charging
points.

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11

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

in the United States increased by 9% in 2022, the lowest growth rate among major
markets. In Korea, slow charging stock has doubled year-on-year, reaching
184 000 charging points.

Fast chargers
Publicly accessible fast chargers, especially those located along motorways,
enable longer journeys and can address range anxiety, a barrier to EV adoption.
Like slow chargers, public fast chargers also provide charging solutions to
consumers who do not have reliable access to private charging, thereby
encouraging EV adoption across wider swaths of the population. The number offast chargers increased by 330 000 globally in 2022, though again the majority(almost 90%) of the growth came from China. The deployment of fast charging
compensates for the lack of access to home chargers in densely populated cities
and supports China’s goals for rapid EV deployment. China accounts for total of
760 000 fast chargers, but more than 70% of the total public fast charging pilestock is situated in just ten provinces.
Figure 1.13 Installed publicly accessible light-duty vehicle charging points by power
rating and region, 2015-2022
Slow chargers

ThousandFast chargers
2 000

2 000

1 600

1 600

1 200

1 200

800

800

400

400

0

2015

2016

2017

China

2018

2019

2020

2021

0

2022

Europe2015

United States

2016

2017

2018

2019

2020

2021

2022

Other countries

IEA. CC BY 4.0.
Note: Values shown represent number of charging points.
Source: IEA analysis based on country submissions.

Installed publicly accessible charging points have increased by around 55%, withaccelerated deployment led by China and Europe.

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In Europe the overall fast charger stock numbered over 70 000 by the end of 2022,
an increase of around 55% compared to 2021. The countries with the largest fast
charger stock are Germany (over 12 000), France (9 700) and Norway (9 000).
There is a clear ambition across the European Union to further develop the publiccharging infrastructure, as indicated by provisional agreement on the proposedGlobal EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

Alternative Fuels Infrastructure Regulation (AFIR), which will set electric charging
coverage requirements across the trans-European network-transport (TEN-T). 12
An agreement between the European Investment Bank and the European
Commission will make over EUR 1.5 billion available by the end of 2023 foralternative fuels infrastructure, including electric fast charging.
The United States installed 6 300 fast chargers in 2022, about three-quarters ofwhich were Tesla Superchargers. The total stock of fast chargers reached 28 000
at the end of 2022. Deployment is expected to accelerate in the coming years
following government approval of the National Electric Vehicle Infrastructure
Formula Program (NEVI). All US states, Washington DC, and Puerto Rico areparticipating in the programme, and have already been allocated USD 885 million
in funding for 2023 to support the build-out of chargers across 122 000 km of
highway (see Policy support for EV charging infrastructure). The US Federal
Highway Administration has announced new national standards for federally
funded EV chargers to ensure consistency, reliability, accessibility andcompatibility. As a result of the new standards, Tesla has announced it will open
a portion of its US Supercharger (where Superchargers represent 60% of the total
stock of fast chargers in the United States) and Destination Charger network to
non-Tesla EVs.

Ratio of electric LDVs per public charger
Deployment of public charging infrastructure in anticipation of growth in EV sales
is critical for widespread EV adoption. In Norway, for example, there were around
1.3 battery electric LDVs per public charging point in 2011, which supported
further adoption. At the end of 2022, with over 17% of LDVs being BEVs, there
were 25 BEVs per public charging point in Norway. In general, as the stock shareof battery electric LDVs increases, the charging point per BEV ratio decreases.
Growth in EV sales can only be sustained if charging demand is met by accessible
and affordable infrastructure, either through private charging in homes or at work,or publicly accessible charging stations.

Previously a directive, the proposed AFIR, once formally approved, would become a binding legislative act, stipulating,among other things, a maximum distance between chargers installed along the TEN-T, the primary and secondary roads
within the European Union.

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Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

Figure 1.14 Public charging points per battery electric light-duty vehicle ratio inselected countries against battery electric light-duty vehicle stock share,
2015-2022
2.4
2016
2.0
2015

1.6

2017

1.2

2015
2018

0.8

2019

0.4
0.0

2016
2017
2022

0%

1%

2%

3%

4%

5%

2018
6%

2019
7%

United States

2020

8%

2021

2022

9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19%
BEV LDV stock share

NorwayChina

Netherlands
IEA. CC BY 4.0.

Notes: BEV = battery electric vehicle; LDV = light-duty vehicle. Charging points include only publicly available chargers,
both fast and slow. Shading grows darker each year.
Source: IEA analysis based on country submissions.

In many advanced markets, as the stock share of battery electric LDVs increased, thecharging point per BEV ratio has decreased.

While PHEVs are less reliant on public charging infrastructure than BEVs, policymaking relating to the sufficient availability of charging points should incorporate(and encourage) public PHEV charging. If the total number of electric LDVs per
charging point is considered, the global average in 2022 was about ten EVs per
charger. Countries such as China, Korea and the Netherlands have maintained
fewer than ten EVs per charger throughout past years. In countries that rely
heavily on public charging, the number of publicly accessible chargers has been
expanding at a speed that largely matches EV deployment.

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However, in some markets characterised by widespread availability of homecharging (due to a high share of single-family homes with the opportunity to installa charger) the number of EVs per public charging point can be even higher. For
example, in the United States, the ratio of EVs per charger is 24, and in Norway
is more than 30. As the market penetration of EVs increases, public charging
becomes increasingly important, even in these countries, to support EV adoption
among drivers who do not have access to private home or workplace charging
options. However, the optimal ratio of EVs per charger will differ based on local
conditions and driver needs.

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

Figure 1.15 Electric light-duty vehicle per public charging point, 2010-2022
50
40
30
20
10
0
2015

2016
World

2017
China

2018
Korea

2019

Netherlands

2020

2021

United States

Norway2022
Japan

IEA. CC BY 4.0.
Note: Charging points include only publicly available chargers, both fast and slow.
Source: IEA analysis based on country submissions.

Countries show different speeds in public charging deployment as the number of EVs on
the road increases.

Perhaps more important than the number of public chargers available is the total
public charging power capacity per EV, given that fast chargers can serve more
EVs than slow chargers. During the early stages of EV adoption, it makes sense
for available charging power per EV to be high, assuming that charger utilisation
will be relatively low until the market matures and the utilisation of infrastructure
becomes more efficient. In line with this, the European Union’s provisional
agreement on the AFIR includes requirements for the total power capacity to beprovided based on the size of the registered fleet.

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Globally, the average public charging power capacity per electric LDV is around2.4 kW per EV. In the European Union, the ratio is lower, with an average around
1.2 kW per EV. Korea has the highest ratio at 7 kW per EV, even with most publicchargers (90%) being slow chargers.

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

Figure 1.16 Number of electric light-duty vehicles per public charging point and kW
per electric light-duty vehicle, 2022
0

1

2

3

4

5

0

10

20

30

40

50

6

kW of public charging per electric LDV
7
8
9
10

New Zealand
Iceland
Australia
NorwayBrazilGermany
SwedenUnited States
Denmark
Portugal
United Kingdom
Spain
CanadaIndonesia
Finland
Switzerland
Japan
ThailandEuropean Union
FrancePolandMexicoBelgium
World
Italy
China
India
South Africa
Chile
GreeceNetherlands
Korea

EV/EVSE (bottom axis)

60
70
80
90
100
Number of electric LDVs per charging point
kW/EV (top axis)
IEA. CC BY 4.0.

Notes: EV = electric vehicle; EVSE = electric vehicle supply equipment; LDV = light-duty vehicle. Kilowatts per EV are
estimated assuming 11 kW for slow and 50 kW for fast chargers. Official national metrics might differ from these values as
they can rely on more granular data.
Source: IEA analysis based on country submissions.

The number of electric light-duty vehicles per public EV charging point varies dramaticallybetween countries, ranging from about 2 vehicles per charging point in Korea to almost 100
in New Zealand.

Charging needs for heavy-duty vehicles

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In the regions where electric trucks are becoming commercially available, battery
electric trucks can compete on a TCO basis with conventional diesel trucks for a
growing range of operations, not only urban and regional, but also in the heavyduty tractor-trailer regional and long-haul segments. Three parameters that
determine the time at which TCO parity is reached are tolls; fuel and operations

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

costs (e.g. the difference between diesel and electricity prices faced by truck
operators, and reduced maintenance costs); and CAPEX subsidies to reduce thegap in the upfront vehicle purchase price. Since electric trucks can provide thesame operations with lower lifetime costs (including if a discounted rate is applied),the time horizon in which vehicle owners expect to recuperate upfront costs is a
key factor in determining whether to purchase an electric or conventional truck.
The economics for electric trucks in long-distance applications can besubstantially improved if charging costs can be reduced by maximising “off-shift”(e.g. night-time or other longer periods of downtime) slow charging, securing bulk
purchase contracts with grid operators for “mid-shift” (e.g. during breaks), fast (upto 350 kW), or ultra-fast (>350 kW) charging, and exploring smart charging andvehicle-to-grid opportunities for extra income.
Electric trucks and buses will rely on off-shift charging for the majority of theirenergy. This will be largely achieved at private or semi-private charging depots or
at public stations on highways, and often overnight. Depots to service growing
demand for heavy-duty electrification will need to be developed, and in manycases may require distribution and transmission grid upgrades. Depending on
vehicle range requirements, depot charging will be sufficient to cover mostoperations in urban bus as well as urban and regional truck operations.
The major constraint to rapid commercial adoption of electric trucks in regional
and long-haul operations is the availability of “mid-shift” fast charging. Although
the majority of energy requirements for these operations could come from “offshift” charging, fast and ultra-fast charging will be needed to extend range suchthat operations currently covered by diesel can be performed by battery electrictrucks with little to no additional dwell time (i.e. waiting). Regulations that mandate
rest periods can also provide a time window for mid-shift charging if fast or ultrafast charging options are available en route: the European Union requires
45 minutes of break after every 4.5 hours of driving; the United States mandates
30 minutes after 8 hours.

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Most commercially available direct current (DC) fast charging stations currently
enable power levels ranging from 250-350 kW. The European Union’s Alternative
Fuels Infrastructure Regulation (AFIR) aims to enable mid-shift charging acrossthe EU’s core TEN-T network, which covers 88% of total long-haul freight activity,
and along other key freight corridors. The provisional agreement reached by theEuropean Council and Parliament includes a gradual process of infrastructure
deployment for electric heavy-duty vehicles starting in 2025. Recent studies ofpower requirements for regional and long-haul truck operations in the
United States and Europe find that charging power higher than 350 kW, and as
high as 1 MW, may be required to fully recharge electric trucks during a 30- to 45minute break.

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

Recognising the need to scale up fast or ultra-fast charging as a prerequisite formaking both regional and, in particular, long-haul operations technically andeconomically viable, in 2022 Traton, Volvo, and Daimler established an
independent joint venture, Milence. With EUR 500 million in collective investmentsfrom the three heavy-duty manufacturing groups, the initiative aims to deploy morethan 1 700 fast (300 to 350 kW) and ultra-fast (1 MW) charging points acrossEurope.
Multiple charging standards are currently in use, and technical specifications forultra-fast charging are under development. Ensuring maximum possible
convergence of charging standards and interoperability for heavy-duty EVs will beneeded to avoid the cost, inefficiency, and challenges for vehicle importers andinternational operators that would be created by manufacturers following divergent
paths.
In China, co-developers China Electricity Council and CHAdeMO’s “ultra ChaoJi”
are developing a charging standard for heavy-duty electric vehicles for up to
several megawatts. In Europe and the United States, specifications for the CharIN
Megawatt Charging System (MCS), with a potential maximum power of 4.5 MW,
are under development by the International Organization for Standardization (ISO)and other organisations. The final MCS specifications, which will be needed forcommercial roll-out, are expected for 2024. After the first megawatt charging site
offered by Daimler Trucks and Portland General Electric (PGE) in 2021, at least
twelve high-power charging projects are planned or underway in the United Statesand Europe, including charging of an electric Scania truck in Oslo, Norway, at a
speed of over 1 MW, Germany’s HoLa project, and the Netherlands Living Lab
Heavy-Duty and Green Transport Delta Charging Stations, as well as investments
and projects in Austria, Sweden, Spain and the United Kingdom.

Planning charging stations at highway depot locations near transmission lines andsubstations can be an optimal solution for minimising costs and increasing charger
utilisation.

“Right-sizing” connections with direct connections to transmission lines at an earlystage, thereby anticipating the energy needs of a system in which high shares offreight activity have been electrified, rather than upgrading distribution grids on an

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Commercialisation of chargers with rated power of 1 MW will require significant
investment, as stations with such high-power needs will incur significant costs inboth installation and grid upgrades. Revising public electric utility business models
and power sector regulations, co-ordinating planning across stakeholders andsmart charging can all help to manage grid impacts. Direct support through pilot
projects and financial incentives can also accelerate demonstration and adoption
in the early stages. A recent study outlines some key design considerations fordeveloping MCS rated charging stations:Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

ad-hoc and short-term basis, will be critical to reduce costs. This will require
structured and co-ordinated planning between grid operators and charging
infrastructure developers across sectors.



Since transmission system interconnections and grid upgrades can take 4-8
years, siting and construction of high-priority charging stations will need to begin
as soon as possible.

Alternative solutions include installing stationary storage and integrating local
renewable capacity, combined with smart charging, which can help reduce bothinfrastructure costs related to grid connection and electricity procurement costs(e.g. by enabling truck operators to minimise cost by arbitraging price variability
throughout the day, taking advantage of vehicle-to-grid opportunities, etc.).
Other options to provide power to electric heavy-duty vehicles (HDVs) are battery
swapping and electric road systems. Electric road systems can transfer power toa truck either via inductive coils 13 in a road, or through conductive connections
between the vehicle and road, or via catenary (overhead) lines. Catenary andother dynamic charging options may hold promise for reducing the uncertainty ofsystem-level costs in the transition to zero-emission regional and long-haul trucks,
competing favourably in terms of total capital and operating costs. They can also
help to reduce battery capacity needs. Battery demand can be further reduced,
and utilisation further improved, if electric road systems are designed to becompatible not only with trucks but also electric cars. However, such approaches
would require inductive or in-road designs that come with greater hurdles in termsof technology development and design, and are more capital intensive. At thesame time, electric road systems pose significant challenges resembling those of
the rail sector, including a greater need for standardisation of paths and vehicles(as illustrated with trams and trolley buses), compatibility across borders for longhaul trips, and appropriate infrastructure ownership models. They provide lessflexibility for truck owners in terms of routes and vehicle types, and have highdevelopment costs overall, all affecting their competitiveness relative to regularcharging stations. Given these challenges, such systems would most effectively
be deployed first on heavily used freight corridors, which would entail close coordination across various public and private stakeholders. Demonstrations on
public roads to date in Germany and Sweden have relied on champions from bothprivate and public entities. Calls for electric road system pilots are also being
considered in the China, India, the United Kingdom and the United States.

Inductive solutions are further from commercialisation and face challenges to deliver sufficient power at highway speeds.

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Global EV Outlook 2023
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Trends and developments in EV markets

Recent developments in battery swapping
Battery swapping entails switching a drained vehicle battery with a fully charged
battery at a swapping station. In general, battery swap-enabled vehicles can also
be charged via conventional plug-in charging infrastructure.
Battery swapping offers advantages in terms of purchase price parity with ICE
vehicles and recharging times. In particular, offering the battery as a service – forexample based on a monthly subscription fee – reduces upfront investment forvehicle owners. In addition, drivers can choose a right-sized battery for daily
commuting and then upgrade to a larger battery ahead of a long journey.
Battery swapping also has the potential to improve battery management (e.g. toextend battery lifetime through controlled charging), co-ordinate charging to
reduce the impact on the grid, increase utilisation of renewable electricity, andeven provide grid services that can generate revenue. Specifically, battery
swapping stations can leverage the aggregation of batteries in order to provide
grid services. In traditional cases in which battery ownership and utilisation remain
at individual vehicle level, more extensive communication and control measures
are required to allow for the provision of grid services.
However, battery swapping presents some disadvantages compared toconventional charging. Firstly, more than one battery is required per vehicle toensure sufficient availability at swap stations, with some companies currently
averaging about two batteries per vehicle. This could affect critical material
demand and the associated environmental impacts, though given that battery
capacity per vehicle may decrease, the net impact is uncertain. Furthermore, thecapital investment required for a battery swap station can be high, given the costof the spare batteries in addition to the infrastructure cost. Additional costs may
also be incurred if batteries are damaged during the swapping process. Estimates
for the costs for a single battery swap station range from USD 390 000 to
USD 1.4 million, including the structure, land requirement, labour, maintenance,electricity and stored batteries. From a customer perspective, the lower resale
value of an electric vehicle that does not include a battery may be a deterrent.
Finally, battery swapping either requires a degree of standardisation (see Policy
incentives for battery swapping in China and India), or for battery swap stations to
be tailored to certain vehicle makes or models. The success of battery swapping
will likely depend on regional conditions, such as supportive policies andstandards, vehicle market structure, and vehicle applications.

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Various battery swapping business models, including battery leasing and BaaS
business models, are particularly interesting for commercial vehicles. Battery
swapping is seeing growing adoption within the LDV sector, including two/threewheelers, used for delivery or ride-hailing services. In particular, battery swapping
for two/three-wheelers is growing in Asian markets. The deployment of batteryGlobal EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

swapping for trucks, however, is thus far limited to China, where the market is
growing. China introduced buses with swappable batteries for the 2008 Beijing
Olympics, but the technology has not developed as much as for other vehicle
segments. However, a number of projects in India focus on battery swapping forelectric buses, especially for intercity operations. Ashok Leyland (now Switch
Mobility), one of India’s largest commercial vehicle manufacturers, set up the firstelectric bus battery-swapping station in 2019.

Two/three-wheelers
International Council on Clean Transportation (ICCT) analysis suggests thatbattery swapping for electric two-wheelers in taxi services (e.g. bike taxis) offers
the most competitive TCO compared to point charging BEV or ICE two-wheelers.
In the case of last-mile delivery via a two-wheeler, point charging currently has a
TCO advantage over battery swapping, but with the right policy incentives andscale, swapping could become a viable option under certain conditions. In general,
as the average daily distance travelled increases, the battery electric two-wheeler
with battery swapping becomes more economical than point charging or gasoline
vehicles. In 2021, the Swappable Batteries Motorcycle Consortium was foundedwith the aim to facilitate battery swapping of light-weight vehicles, including
two/three-wheelers, by working together on common battery specifications.
Battery swapping of electric two/three-wheelers is particularly gaining momentum
in India. There are currently over ten different companies in the Indian market,
including Gogoro, a Chinese Taipei-based electric scooter and battery swapping
technology leader. Gogoro claims its batteries power 90% of electric scooters in
Chinese Taipei, and the Gogoro network has more than 12 000 battery swapping
stations to support over 500 000 electric two-wheelers across nine countries,
mostly in the Asia Pacific region. Gogoro has now formed a partnership with Indiabased Zypp Electric, which runs an EV-as-a-service platform for last-miledeliveries; together, they are deploying 6 battery swapping stations and 100
electric two-wheelers as part of a pilot project for business-to-business last-miledelivery operations in the city of Delhi. At the beginning of 2023, they raised
USD 25 million, which they will use to expand their fleet to 200 000 electric twowheelers across 30 Indian cities by 2025. Sun Mobility has a longer history ofbattery swapping in India, with over 210 swapping stations across the country forelectric two- and three-wheelers, including e-rickshaws, with partners such as
Amazon India. Thailand is also seeing corporate interest in battery swapping
services for motorcycle taxi and delivery drivers.

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While most prevalent in Asia, battery swapping for electric two-wheelers is also
spreading to Africa. For example, Rwandan electric motorbike start-up Ampersand
operates battery swap stations, with a focus on serving motorcycle taxi operations

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

that require long daily ranges. Ampersand has built ten battery swap stations inKigali and three in Nairobi, Kenya. These stations perform close to 37 000 battery
swaps a month.

TrucksFor trucks in particular, battery swapping can have major advantages over ultrafast charging. Firstly, swapping can take as little as 3-5 minutes, which would be
difficult and expensive to achieve through cable-based charging, requiring an
ultra-fast charger connected to medium- to high-voltage grids and expensive
battery management systems and battery chemistries. Avoiding ultra-fastcharging can also extend battery capacity, performance and cycle life.
Battery-as-a-service (BaaS), separating the purchase of the truck and the battery,and establishing a lease contract for the battery, substantially reduces the upfront
purchase cost (by as much as 50%). In addition, since trucks tend to depend on
lithium iron phosphate (LFP) battery chemistries, which are more durable thanlithium nickel manganese cobalt oxide (NMC) batteries, they are well-suited forswapping in terms of safety and affordability.
However, the cost of building a station will likely be higher for truck battery
swapping given the larger vehicle size and heavier batteries, which require more
space and specialised equipment to perform the swap. Another major barrier isthe requirement that batteries be standardised to a given size and capacity, which
truck OEMs are likely to perceive as a challenge to competitiveness as battery
design and capacity is a key differentiator among electric truck manufacturers.
China is at the forefront of battery swapping for trucks due to significant policy
support and use of technology designed to complement cable charging. In 2021,
China’s MIIT announced that a number of cities would pilot battery swapping
technology, including HDV battery swapping in three cities. Almost all major
Chinese heavy truck manufacturers, including FAW, CAMC, Dongfeng, Jiangling
Motors Corporation Limited (JMC), Shanxi Automobile, and SAIC, have now
launched a battery swapping-enabled model of their battery electric trucks. In 2022
alone, more than 12 000 battery swapping-enabled electric trucks were sold in
China.

Cars

PAGE | 54

IEA. CC BY 4.0.

China is also the leader in battery swapping for passenger cars. Across all modes,
the total number of battery swapping stations in China stood at almost 2 000 at
the end of 2022, 50% higher than at the end of 2021. NIO, which produces battery
swapping-enabled cars and the supporting swapping stations, runs more than
1 300 battery swapping stations in China, reporting that the network covers morethan two-thirds of mainland China. Half of their swapping stations were installedGlobal EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

in 2022, and the company has set a target of 4 000 battery swap stations globallyby 2025. The company claims their swap stations can perform over 300 swaps
per day, charging up to 13 batteries concurrently at a power of 20-80 kW.
NIO also announced plans to build battery swap stations in Europe as their battery
swapping-enabled car models became available in European markets towards theend of 2022. The first NIO battery swap station in Sweden was opened in
November 2022, and by the end of 2022, ten NIO battery swap stations had been
opened across Norway, Germany, Sweden and the Netherlands. In contrast to
NIO, whose swapping stations service NIO cars, the Chinese battery swapping
station operator Aulton’s stations support 30 models from 16 different vehicle
companies.
Battery swapping could also be a particularly attractive option for LDV taxi fleets,
whose operations are more sensitive to recharging times than personal cars. US
start-up Ample currently operates 12 battery swapping stations in the San
Francisco Bay area, mainly serving Uber rideshare vehicles.

Batteries
Battery demand for EVs continues to rise
Automotive lithium-ion (Li-ion) battery demand increased by about 65% to
550 GWh in 2022, from about 330 GWh in 2021, primarily as a result of growth inelectric passenger car sales, with new registrations increasing by 55% in 2022
relative to 2021.
In China, battery demand for vehicles grew over 70%, while electric car sales
increased by 80% in 2022 relative to 2021, with growth in battery demand slightly
tempered by an increasing share of PHEVs. Battery demand for vehicles in the
United States grew by around 80%, despite electric car sales only increasing byaround 55% in 2022. While the average battery size for battery electric cars in the
United States only grew by about 7% in 2022, the average battery electric carbattery size remains about 40% higher than the global average, due in part to thehigher share of SUVs in US electric car sales relative to other major markets, 14 as
well as manufacturers’ strategies to offer longer all-electric driving ranges. Global
sales of BEV and PHEV cars are outpacing sales of hybrid electric vehicles(HEVs), and as BEV and PHEV battery sizes are larger, battery demand further
increases as a result.

For more information on the climate impact of SUVs, refer to the IEA’s 27 February 2023 commentary on the subject.

PAGE | 55

IEA. CC BY 4.0.

14

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

600

GWh per year

GWh per year

Figure 1.17 Battery demand by mode and region, 2016-2022

500
400

600
500
400

300

300

200

200

100

100
0

0
2016 2017 2018 2019 2020 2021 2022
LDVs

Bus

2016 2017 2018 2019 2020 2021 2022
China

Other

EuropeUnited States

Other

IEA. CC BY 4.0.
Notes: LDVs = light-duty vehicles, including cars and vans; In the left chart, “Other” includes medium- and heavy-duty
trucks and two/three-wheelers. Battery demand refers to automotive lithium-ion batteries. This analysis does not include
conventional hybrid vehicles.
Source: IEA analysis based on EV Volumes.

Global battery demand increased by 65% in 2022, mainly as a result of electric car sales in
China.

The increase in battery demand drives the demand for critical materials. In 2022,
lithium demand exceeded supply (as in 2021) despite the 180% increase inproduction since 2017. In 2022, about 60% of lithium, 30% of cobalt and 10% of
nickel demand was for EV batteries. Just five years earlier, in 2017, these shareswere around 15%, 10% and 2%, respectively. As has already been seen for
lithium, mining and processing of these critical minerals will need to increase
rapidly to support the energy transition, not only for EVs but more broadly to keep
up with the pace of demand for clean energy technologies. 15 Reducing the needfor critical materials will also be important for supply chain sustainability, resilienceand security. Accelerating innovation can help, such as through advanced battery
technologies requiring smaller quantities of critical minerals, as well as measures
to support uptake of vehicle models with optimised battery size and thedevelopment of battery recycling.

For more information on the future of supply and demand of critical minerals, refer to the Energy Technology Perspective
2023 report.

PAGE | 56

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15

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

Figure 1.18 Overall supply and demand of battery metals by sector, 2016-2022
Lithium

Cobalt

200

kt

140
120

3 000

160

2 500

100
120

80
60

2 000
1 500

80

1 000

40
40

20
0

Nickel

3 500

2016

2018

Demand:

2020

2022

EV demand

0

500
2016

2018

Other batteries

2020

2022

Ceramics and glass

0

2016

2018

2020

MetalsOther

Supply2022

IEA. CC BY 4.0.
Note: EV = electric vehicle. The metals category includes alloying applications. Supply refers to refinery output and notmining output.
Source: IEA analysis based on Mineral Commodity Summary 2022 by USGS, lithium and cobalt global supply-demandbalance (January 2023) and nickel global supply-demand balance (January 2023) from S&P Global and World Metal
Statistics Yearbook by the World Bureau of Metal Statistics.

In 2022, supply of nickel and cobalt exceeded demand, while lithium demand outpaced
supply by a small margin.

Battery chemistries are diversifying
New alternatives to conventional lithium-ion are on the rise
In 2022, lithium nickel manganese cobalt oxide (NMC) remained the dominantbattery chemistry with a market share of 60%, followed by lithium iron phosphate(LFP) with a share of just under 30%, and nickel cobalt aluminium oxide (NCA)with a share of about 8%.

PAGE | 57

IEA. CC BY 4.0.

Lithium iron phosphate (LFP) cathode chemistries have reached their highest
share in the past decade (Figure 1.19). This trend is driven mainly by thepreferences of Chinese OEMs. Around 95% of the LFP batteries for electric LDVs
went into vehicles produced in China, and BYD alone represents 50% of demand.
Tesla accounted for 15%, and the share of LFP batteries used by Tesla increased
from 20% in 2021 to 30% in 2022. Around 85% of the cars with LFP batteries
manufactured by Tesla were manufactured in China, with the remainder being
manufactured in the United States with cells imported from China. In total, onlyaround 3% of electric cars with LFP batteries were manufactured in the
United States in 2022.

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

LFP batteries contrast with other chemistries in their use of iron and phosphorus
rather than the nickel, manganese and cobalt found in NCA and NMC batteries.
The downside of LFP is that the energy density tends to be lower than that of
NMC. LFP batteries also contain phosphorus, which is used in food production. If
all batteries today were LFP, they would account for nearly 1% of current
agricultural phosphorus use by mass, suggesting that conflicting demands forphosphorus may arise in the future as battery demand increases.
Figure 1.19 Electric light-duty vehicle battery capacity by chemistry, 2018-2022
100%
80%
60%
40%
20%
0%
2018

2019

2020

Low-nickel

High-nickel

2021
LFP

2022
Other
IEA. CC BY 4.0.

Notes: LFP = Lithium iron phosphate. Low-nickel includes: NMC333. High-nickel includes: NMC532, NMC622, NMC721,
NMC811, NCA and NMCA. Cathode sales share is based on battery capacity.
Source: IEA analysis based on EV Volumes.

The share of lithium iron phosphate reached its highest ever point, accounting for almost
30% of new electric LDV battery capacity in 2022.

PAGE | 58

IEA. CC BY 4.0.

With regards to anodes, a number of chemistry changes have the potential to
improve energy density (watt-hour per kilogram, or Wh/kg). For example, silicon
can be used to replace all or some of the graphite in the anode in order to make itlighter and thus increase the energy density. Silicon-doped graphite alreadyentered the market a few years ago, and now around 30% of anodes containsilicon. Another option is innovative lithium metal anodes, which could yield evengreater energy density when they become commercially available (Figure 1.20).

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

Figure 1.20 Material content in different anode and cathodes

Anode

0%

20%

40%

60%

80%
Lithium

Li metal

Aluminium

Si-Gr

NickelGraphite

Manganese
CobaltNa-ionIron

Cathode

LFP

Phosphorous

NMC811Oxygen

NMC622

Carbon

NMC532

Silicon

NMC333

SodiumNitrogen

NCA
0.0

0.6

1.2

1.8

2.4

Share in 2022
kg/kWhIEA. CC BY 4.0.

Notes: Li metal = Lithium metal anode; Si-Gr = Silicon-graphite anode; Graphite = Pure graphite anode; Na-ion = Sodiumion; LFP = Lithium iron phosphate; NMC = Lithium nickel manganese cobalt oxide; NCA = Lithium nickel cobalt aluminium
oxide. Materials composing the battery casing and the electrolyte are excluded. Chemistry shares are based on demand.
The share of NCA battery includes every NCA type and Si-Gr includes every degree of silicon-graphite mix. Carbon covers
the graphite composing anodes. The Na-ion cathode shown is the Prussian white.
Source: IEA analysis based on Lithium-Ion Batteries: State of the Industry 2022 by BNEF, BatPaC v4 by Argonne
Laboratory and Sodium-ion batteries: disrupt and conquer? by Wood Mackenzie.

Lithium iron phosphate cathodes do not rely on nickel, manganese or cobalt, which has
contributed to their increased market share.

In recent years, alternatives to Li-ion batteries have been emerging, notably
sodium-ion (Na-ion). This battery chemistry has the dual advantage of relying onlower cost materials than Li-ion, leading to cheaper batteries, and of completely
avoiding the need for critical minerals. It is currently the only viable chemistry that
does not contain lithium. The Na-ion battery developed by China’s CATL isestimated to cost 30% less than an LFP battery. Conversely, Na-ion batteries do
not have the same energy density as their Li-ion counterpart (respectively
75 to 160 Wh/kg compared to 120 to 260 Wh/kg). This could make Na-ion
relevant for urban vehicles with lower range, or for stationary storage, but could
be more challenging to deploy in locations where consumers prioritise maximum
range autonomy, or where charging is less accessible. There are nearly 30 Naion battery manufacturing plants currently operating, planned or underconstruction, for a combined capacity of over 100 GWh, almost all in China. For
comparison, the current manufacturing capacity of Li-ion batteries is around
1 500 GWh.

PAGE | 59

IEA. CC BY 4.0.

Multiple carmakers have already announced Na-ion electric cars, such as the
Seagull by BYD, which has an announced range of 300 km and is sold for
USD 11 600 (with possible discounts bringing the price down to USD 9 500), andthe Sehol EX10, produced by the VW-JAC joint venture, with a 250 km range.

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

While these first models are likely to be slightly more expensive than the cheapest
small BEV models in China – such as the Wuling Mini BEV, sold for as little as
USD 5 000 to 6 500 – they are still cheaper than equivalent options with similar
driving range. To compare, the Wuling Mini BEV’s range stands at 170 km, but
BYD’s Dolphin BEV, the second best-selling small BEV in China in 2022, with asimilar range to the announced Na-ion cars, can cost more than USD 15 000. BYD
plans to progressively integrate Na-ion batteries into all its models below
USD 29 000 as battery production ramps up. These announcements suggest thatelectric vehicles powered by Na-ion will be available for sale and driven for the
first time in 2023-2024, hence bringing the technology to a readiness level (TRL 16)
of 8-9, between first-of-a-kind commercial and commercial operation in therelevant environment. In 2022, it was assessed at TRL 6 (full prototype at scale)in the IEA Clean Technology Guide, compared to only TRL 3-4 (small prototypes)
in the assessment from 2021, highlighting quick technological progress.

Critical mineral prices can have an impact on chemistry choice
The variability in price and availability of critical minerals can also explain some ofthe developments in battery chemistry from the last few years (Figure 1.21). NMC
chemistries using an equal ratio of nickel, manganese, and cobalt (NMC333 or
NMC111) were popular until 2015. Since then, cobalt price increases andconcerns affecting public acceptance of cobalt mining have contributed to a shift
towards lower-cobalt ratios, such as NMC622, and then NMC811, which arenevertheless more difficult to manufacture. In 2022, the price of nickel increased,reaching a peak twice as high as the 2015-2020 average. This created incentives
to use chemistries that are less reliant on nickel, such as LFP, despite their lower
energy density.
Lithium carbonate prices have also been steadily increasing over the past two
years. In 2021, prices multiplied four- to five-fold, and continued to rise throughout
2022, nearly doubling between 1 January 2022 and 1 January 2023. At the
beginning of 2023, lithium prices stood six times above their average over the
2015-2020 period. In contrast to nickel and lithium, manganese prices have been
relatively stable. One reason for the increase in prices for lithium, nickel and cobalt
was the insufficient supply compared to demand in 2021 (Figure 1.18). Althoughnickel and cobalt supply surpassed demand in 2022, this was not the case forlithium, causing its price to rise more strongly over the year. Between January andMarch 2023, lithium prices dropped 20%, returning to their late 2022 level. The
combination of an expected 40% increase in supply and slower growth in demand,
especially for EVs in China, has contributed to this trend. This drop – if sustained– could translate into lower battery prices.

PAGE | 60

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16Technology Readiness Level (TRL) provides a snapshot of the maturity of a given technology. It has 11 steps ranging frominitial idea at step 1 to proof of stability reached at step 11. For more information, refer to the IEA Clean Technology Guide.

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets

Beyond those materials, global commodity prices have surged in the last few
years, as a result of supply disruptions in the wake of the Covid-19 pandemic,
rising demand as the global economy started to recover, and Russia’s invasion of
Ukraine in February 2022, among other factors.

600

120

500

100

400

80

300

60

200

40

100

20

0
2015

Index (2015 = 100)

Index (1 Jan 2017 = 100)

Figure 1.21 Price of selected battery materials and lithium-ion batteries, 2015-2023

0
2016

Lithium carbonate

2017

2018
Cobalt2019
Nickel

2020
Copper

2021

2022

Manganese

2023
Battery (right)
IEA. CC BY 4.0.

Notes: Data until March 2023. Lithium-ion battery prices (including the pack and cell) represent the global volume-weighted
average across all sectors. Nickel prices are based on the London Metal Exchange, used here as a proxy for global pricing,although most nickel trade takes place through direct contracts between producers and consumers. The 2023 battery pricevalue is based on cost estimates for NMC 622.
Source: IEA analysis based on material price data by S&P, 2022 Lithium-Ion Battery Price Survey by BNEF and Battery
Costs Drop as Lithium Prices in China Fall by BNEF.

From 2021 to the end of 2022, the price of critical materials such as lithium, cobalt andnickel increased dramatically, putting pressure on historical Li-ion battery price decreases.

In 2022, the estimated average battery price stood at about USD 150 per kWh,with the cost of pack manufacturing accounting for about 20% of total battery cost,compared to more than 30% a decade earlier. Pack production costs havecontinued to decrease over time, down 5% in 2022 compared to the previous year.
In contrast, cell production costs increased in 2022 relative to 2021, returning to2019 levels. This can be explained in part by the increasing prices of materials,
which account for a significant portion of cell price, and of electricity, which affects
manufacturing costs, whereas efficiency gains in pack manufacturing help
decrease costs. Bloomberg New Energy Finance (BNEF) sees pack
manufacturing costs dropping further, by about 20% by 2025, whereas cell
production costs decrease by only 10% relative to their historic low in 2021. This
warrants further analysis based on future trends in material prices.

PAGE | 61

IEA. CC BY 4.0.

The effect of increased battery material prices differed across various battery
chemistries in 2022, with the strongest increase being observed for LFP batteries

Global EV Outlook 2023
Catching up with climate ambitions

Trends and developments in EV markets(over 25%), while NMC batteries experienced an increase of less than 15%(Figure 1.21). Since LFP batteries contain neither nickel nor cobalt, which are
relatively expensive compared to iron and phosphorus, the price of lithium plays arelatively larger role in determining the final cost. Given that the price of lithiumincreased at a higher rate than the price of nickel and cobalt, the price of LFP
batteries increased more than the price of NMC batteries. Nonetheless, LFP
batteries remain less expensive than NCA and NMC per unit of energy capacity.
The price of batteries also varies across different regions, with China having thelowest prices on average, and the rest of the Asia Pacific region having the highest(Figure 1.21). This price discrepancy is influenced by the fact that around 65% ofbattery cells and almost 80% of cathodes are manufactured in China.

200
150

250
200
150

100

100

50

50

0
2020

2021

Regional battery price

Metal price index

Battery price

2022
LFP

Index (Europe = 100)

250

Index (2020 = 100)

Index (LFP 2020 = 100)

Figure 1.22 Price index for selected battery chemistries, regions and metal price,2020-2023

0
2020
NCA

120
110
100
90
80

2021

2022
NMC

2023

70
China
North America

Asia Pacific
EuropeIEA. CC BY 4.0.

Note: LFP = Lithium iron phosphate; NMC = Lithium nickel manganese cobalt oxide; NCA = Lithium nickel cobalt aluminium
oxide. The metal price index is based on the price evolution of four commodities (lithium carbonate, cobalt, nickel andcopper) weighted by their use in each battery chemistry. For this metal price index, NMC uses the NMC622 chemistry. The
2023 value of the metal price index covers only the first 3 months of the year. Asia Pacific excludes China. Regional battery(pack) price refers to 2022.
Source: IEA analysis based on material price data by S&P, 2022 Lithium-Ion Battery Price Survey by BNEF, BatPaC v4 by
Argonne Laboratory and Lithium-Ion Batteries: State of the Industry 2022 by BNEF.

PAGE | 62

IEA. CC BY 4.0.

Despite a higher relative increase in price compared to other battery chemistries, LFP
batteries remain the lowest price per kWh.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

Policy developments andcorporate strategy
Overview
Global electric vehicle (EV) markets today differ widely, shaped by different levelsof policy support, corporate activity, consumer preference and awareness, driving
patterns and cultural specificities. The role of policy has been particularly
significant in steering corporate strategy towards electrification and enabling
consumer uptake.
In today’s major EV markets – including China, Europe and the United States –early adoption was jump-started in many cases by policies to spur demand, suchas vehicle purchase incentives. Direct incentives for carmakers were also used in
China. Many of these countries and regions are now seeing EV markets maturing,
especially for cars, for which sales shares are increasing rapidly. More developed
markets such as China and several European countries are now progressively
decreasing or phasing out incentive schemes for electric cars and shifting focus
towards other segments such as heavy transport and charging.
At the same time, some governments in major markets have increased theirtargets for EV adoption further and are working to address other parts of EV supply
chains, such as through policy support for vehicle and battery manufacturing andcritical mineral supply chains. Many other countries outside the major markets
have also started to introduce policy to support EV adoption in recent years, forthe first time in some cases. Overall, global spending by governments andconsumers on electric cars has significantly increased in the past few years,
exceeding USD 400 billion in 2022.

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For companies, policy requirements were an important driver for electrification in
the early years of EV adoption. With the exponential growth of electric car sales,
however, it has become increasingly important for major incumbent carmakers tooffer EVs as a key part of their portfolios in order to capture market share andmaintain a competitive edge. Competition is increasing, with a growing number of
new entrants, particularly from China but also from other emerging market anddeveloping economies (EMDEs), pushing the entire industry to accelerate
decarbonisation. Overall, corporate strategy among major carmakers is shifting,and – as in recent years – 2022-2023 saw a series of important EV
announcements: fully electric fleets, cheaper cars, more investments, andintegration with battery making and critical minerals.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

This section of the Outlook provides information on selected policy developments
announced between April 2022 and March 2023, since the last edition of the IEA
Global Electric Vehicle Outlook in 2022. 1
As in recent years, most policies supporting EVs target the electric light-duty
vehicle (LDV) segment, for which market maturity is most advanced and vehicle
availability greatest. In 2022, more than 90% of global sales of LDVs were coveredby policy that encourages EV uptake. Typical policies include fuel economy andpollutant standards; zero-emission vehicle mandates; economic and budgetary
regulation for fuels and vehicles, such as through fiscal regimes and taxation;purchase incentives and subsidies; and bans on internal combustion engine (ICE)only vehicles.
There is an increasing policy focus on the heavy-duty vehicle (HDV) segment,
including medium freight trucks, heavy freight trucks and buses, and almost 70%
of global HDV sales are now covered by EV policies. Countries are increasing
funding, committing to zero-emission vehicle 2 (ZEV) deployment targets andenacting HDV-specific policies for the first time. In 2022, 11 countries signed on
to the Global Memorandum of Understanding (MoU) on Zero-Emission Mediumand Heavy-Duty Vehicles, bringing the total number of signatories to 27. These
countries aim for 100% zero-emission new truck and bus sales by 2040.
Policies are also shifting towards electric vehicle supply equipment (EVSE), or
charging, and currently almost 80% of global EV sales (LDV and HDV) arecovered by EVSE-related policy. Countries are increasingly dedicating funds to
EVSE deployment, acknowledging that lack of charging infrastructure can be a
critical barrier to EV adoption.
The 2022-2023 period was notable for the announcement of policies in theEuropean Union and United States – new CO2 standards and the Inflation
Reduction Act (IRA), respectively – which are expected to have a significant
impact on the pathway to zero-emission road transport. In addition, several
EMDEs outside China have developed specific industrial policy to support battery
and EV production, seeking to capitalise on opportunities to strengthen domestic
manufacturing capacity.

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IEA. CC BY 4.0.

1More comprehensive policy coverage and analysis, both regionally and prior to 2022-2023, can be found online in theinteractive IEA Global EV Policy Explorer. The explorer now includes policies and targets from around 90 countries,
covering the majority of the annual global sales shares of LDVs (over 90%), HDVs (70%), and two/three-wheelers (almost70%) respectively. In particular, new entries for EMDEs have been added. The explorer provides information on
government policies, ambitions and targets encouraging EV adoption across all road transport segments. It covers vehicle
deployment targets, financial incentives, manufacturing policies, as well as targets and financial support for charging
infrastructure.
2
Includes battery, plug-in, and fuel cell electric vehicles.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

Country policy coverage

40

Share of global market coverage

Number of countries with EV policy

Figure 2.1. Countries with EV-related policy, and subsequent market coverage by
category, 2022

35
30
25
20
15
10
5
0
LDV

EVSE

HDV
Europe

100%
80%
60%
40%
20%

2/3W
Asia

Global market policy coverage

Americas

0%
LDV

EVSE

Africa

RoW

HDV

2/3W

IEA. CC BY 4.0.
Notes: EV = electric vehicle; LDV = light-duty vehicle; HDV = heavy-duty vehicle; 2/3W = two/three-wheeler; EVSE =electric vehicle supply equipment; RoW = rest of the world. Countries are counted when they have at least one EVsupportive policy in a given category, for example a purchase incentive, a national target for sales shares, or favourable
taxation. The share of global market coverage then represents the share of the vehicle market that countries with policies
account for. Coverage of EVSE-related policies is based on LDV and HDV sales.
Source: IEA analysis based on announced policies; see the Global EV Policy Explorer for further details.

As of 2022, more countries have EV-related policies than do not, accounting for more than
90% of global LDV sales and around 70% of HDV and two/three-wheeler sales.

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Zero-emission vehicle targets are a cornerstone of policy for transport
decarbonisation, and almost all such targets, with respect to market coverage,
have relatively short- to medium-term implementation dates. For LDVs, aroundhalf of annual global sales are covered by targets for 2035 or earlier, increasing
only slightly to 55% by 2050. While the vast majority of this coverage comes from
China, the European Union and the United States, there are promising increases
in ambition in other markets.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

Figure 2.2. Global zero-emission vehicle mandates and internal combustion engine
bans
Legend:Chile

100% electrified sales
100% ZEV sales

Japan

Norway100% electrified stock

Denmark

Slovenia

United States(25%*)

IcelandUnitedKingdom

Cabo Verde

IrelandSingapore

CanadaAustria

IsraelEuropean
Union

Argentina

Costa Rica

Netherlands

UkraineUnitedKingdom

Sri Lanka

MexicoICE ban
100% zero-emission public bus sales
100% zero-emission public bus stock

2025

2030

2035

2040

2045

2050

Denmark

UkraineAustria

Cabo Verde

Chile

MexicoEcuador

Netherlands

Chile

CanadaCosta Rica

Colombia

UnitedKingdom

Dominican
Republic

New ZealandSingapore

IsraelLDV
HDV

IEA. CC BY 4.0.
* Refers to the share of passenger light-duty vehicle sales accounted for by Advanced Clean Cars II (ACC II) signatories or
proposed signatories.
Notes: ICE = internal combustion engine; ZEV = zero-emission vehicle; “electrified” includes hybrid electric vehicles (HEVs)
in addition to electric vehicles (EVs) and fuel cell electric vehicles. European Union countries with LDV targets earlier thanthe EU 2035 target are included separately. Only countries that have legislated or proposed an ICE ban or 100%
electrification target have been included. The proposed EU heavy-duty vehicle CO2 standards include a 100% emission
reduction target only for urban buses, and are thus not included in the chart. The Global Memorandum of Understanding(MoU) on Zero-Emission Medium- and Heavy-Duty Vehicles is a pledge and is therefore also not included.
Source: IEA analysis based on announced policies; see the Global EV Policy Explorer for further details.

Zero-emission vehicle targets are now in place in an increasing number of countries,
including in emerging markets and developing economies.

Policy to develop EV supply chains
Policy increasingly aims to boost manufacturing, not justdeployment
Several of the policies announced in 2022 and early 2023 relate to thedevelopment of EV manufacturing in addition to EV deployment.

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In China, the largest market for electric cars, supporting EV manufacturers andcompanies through direct incentives along EV supply chains to ramp up domestic
production is not a new phenomenon. The past decade has seen a sustained useof supply- and demand-side incentives for domestic firms, as well as joint ventureswith international carmakers. Support has been particularly prevalent at the local
level in China, thereby stimulating national uptake and the development of several
major EV companies. Regions and cities have also recently announced targets for
manufacturing, such as Chongqing’s goal to produce and sell more than 10% ofGlobal EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

China’s new energy vehicles (NEVs), 3 and Jilin’s aim to reach an annual
production capacity of around 1 million NEVs, both by 2025, supported by policies
focusing on EV manufacturing.
There were also notable announcements in other major markets, such as the IRA
in the United States, and the Green Deal Industry Plan in the European Union. In
India, the aims of the national Production Linked Incentive (PLI) scheme toencourage domestic EV manufacturing have also been supported by subnational
government, such as in Tamil Nādu, where updated policy encourages local EV
manufacturing. A number of other examples in EMDEs further demonstrate thistrend, such as in Indonesia, which has introduced policy to invest in battery
manufacturing, and Ethiopia, which is offering tax exemptions for locallyassembled EVs in order to attract investment. In July 2022, Morocco announcedplans to build a large EV battery factory, and the country marked the completionof its first domestically produced battery electric vehicle (BEV) in December 2022
following the reduction of tariffs on lithium-ion cells in 2021 to encourageassembly.

United States: Inflation Reduction Act
The Inflation Reduction Act (IRA), passed in August 2022, includes various tax
incentives and funding programmes to meet the aim of building a clean energy
economy. Part of the Act concentrates on accelerating EV adoption, withdedicated funding drawn from the USD 369 billion allocated for climate
investments.
The Clean Vehicle Tax Credit introduces a new set of conditions for EV models toqualify for incentives. From 2023 onwards, these conditions stipulate that final
assembly must occur in North America, and that vehicles must have a 7 kWhbattery or greater (to exclude low-range plug-in hybrid electric vehicles [PHEVs]),
be under 6.35 t gross vehicle weight (GVW), and have a suggested retail price ofless than USD 80 000 for vans, SUVs and pickup trucks, or USD 55 000 for othervehicles. In order to qualify for the incentive, the EV buyer’s household incomemust be below the limit set by the US Internal Revenue Service. These conditions
open eligibility for an incentive of up to USD 7 500 per vehicle: USD 3 750 if thebattery meets the critical mineral requirement, and another USD 3 750 if it meetsthe component requirement. 4 Furthermore, from 2025, vehicles with any criticalminerals from “foreign entities of concern” will not be eligible for the credit, andvehicles with battery components from such entities will be ineligible from 2024.

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3
The policy specifically refers to “Intelligent and Connected New Energy Vehicles”, and therefore may not necessarily mean
10% of total NEV sales in China.
4This requirement stipulates that: 1) in 2023, 40% or more of the battery critical minerals must be extracted or processed in
the United States or a US free trade country, or have been recycled in North America, gradually increasing to 80% in 2027
and beyond; and 2) in 2023, 50% of the value of the components in the battery must be manufactured or assembled in North
America, gradually increasing to 100% in 2029 and beyond.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

Several of the major US automotive manufacturers have submitted a list of specificmodels that comply with the new requirements, and removing the manufacturer
sales cap of 200 000 means GM and Tesla can participate in the scheme. Of the
37 models listed, 4 are PHEVs and 33 are BEVs. The average listed retail pricefor the eligible PHEVs and BEVs is just below the USD 55 000 and USD 80 000
limit for cars and SUVs, respectively, indicating original equipment manufacturer(OEM) corporate strategy to meet the eligibility criteria of the IRA, even if this
implies cutting prices in some cases. The Act also commits USD 1 billion to
incentives and infrastructure projects for HDVs between now and 2031. 5 For
vehicles from approved manufacturers, with 15 kWh or more of battery capacity,
the tax credits are up to USD 40 000 per vehicle.
In addition to demand-side credits for vehicle purchase, the IRA includes supplyside Advanced Manufacturing Production Tax Credits. Under this scheme, the US
government provides subsidies for domestic battery production of up to
USD 35 per kWh, plus another USD 10 per kWh for module assembly. Assuming
average battery prices in 2022 are around USD 150 per kWh, these new US
production incentives could account for nearly a third of total battery price.
Finally, in addition to confirming that countries with existing free trade agreements
have preferred status as suppliers, the United States signed an MoU with the
Democratic Republic of Congo and Zambia in January 2023, committing tosupport development of a productive supply chain from mining to assembly.

European Union: Green Deal Industry Plan
In February 2023, the European Union presented the Green Deal Industrial Plan,
which has four pillars related to progress on net zero-related projects: fasterpermitting, financial support, enhanced skills, and open trade. The plan also
includes provision for the creation of a Critical Raw Materials Act, the proposal forwhich was issued in March 2023, with a focus on security of supply, extraction andenvironmental standards, as well as recycling.
The faster permitting for facilities, including battery production, will be formalised
via the proposed Net Zero Industry Act, providing simplified and predictable
planning approvals. As well as loosening rules on state aid until 2025, the financial
support package of the plan attempts to allow faster access to essential subsidies
and loans, to compensate businesses for high energy prices, to help ensureliquidity, and to reduce electricity demand. The plan also aims to reskill workers
affected by the green transition, and to establish Net Zero Industry Academies.
Lastly, the trade element focuses on improving the resilience of the EU’s supply
chains, opening trade with new partners and attracting private investment.

Also included in the budget is provision of “workforce development and training, and planning and technical activities”.

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Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

In March 2023, the European Union proposed the Net Zero Industry Act, whichaims to meet 40% of the European Union’s needs for strategic net zerotechnologies with EU manufacturing capacity by 2030. These technologies
explicitly include battery and storage technologies, and for batteries the aim is fornearly 90% of the European Union’s annual battery demand to be met by EU
battery manufacturers, with a combined manufacturing capacity of at least
550 GWh in 2030, in line with the objectives of the European Battery Alliance.
These announcements came just as CO2 standards for car sales over 2030-2035
tightened under the Fit for 55 package.

India: Production Linked Incentives (PLI)The Indian PLI on Advanced Chemistry Cell (ACC) Battery Storage wasannounced in late 2021 with the aim of boosting domestic battery manufacturingwith a budget of INR 181 billion (Indian rupees) (USD 2.2 billion). Specifically, thegovernment aimed to reach a cumulative 50 GWh in domestic manufacturing
capacity by allocating funding to companies based on the sales of batteries
manufactured in India, disbursed over five years, and dependent on meeting adomestic value-add of at least 25% in year 1, increasing to 60% in year 5. This isparticularly ambitious given that there is currently no significant domestic battery
cell manufacturing in India, and the 50 GWh figure is 50% greater than anticipateddomestic demand as projected in the IEA Stated Policies Scenario (STEPS) in
2025. The scheme attracted 10 bids with cumulative capacity of 128 GWh in early
2022, and by July 2022, the government had assigned funding to 3 companies –Reliance, Ola and Rajesh – for a total of at least 30 GWh of battery manufacturing
capacity with the remainder to be allocated to the next highest placed bidder(s).
Other private companies are expected to establish an additional 95 GWh.
The Automobile and Auto Component PLI scheme has two parts: the Champion
OEM incentive scheme, which grants incentives for sales of advanced automotive
technology vehicles (battery electric and hydrogen fuel cell vehicles) across all
vehicle segments; and the Component Champion scheme, which provides
incentives for sales of certain components for both ICE and electric vehicles. The
budgetary outlay is INR 260 billion (USD 3.2 billion) over five years, and thescheme has been successful in attracting investments worth INR 677 billion(USD 8.3 billion), which will be spent over a period of five years. A total of 95
applicants had been approved under this scheme as of March 2022. In bothschemes, the minimum domestic value-add requirement is 50%.

Leveraging critical mineral resources to build domestic
manufacturing

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Recognition of the vital role of critical minerals in the EV transition has also
catalysed policy action. As carmakers and battery manufacturers around the worldGlobal EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

race to secure supply as EV demand increases, governments are seeking toposition themselves in global supply chains, with a focus on increasing domestic
capacity. It will be important to ensure these new supply chains for critical minerals
are ethical and environmentally sustainable into the future.
The European Union’s December 2022 proposed revisions to the EU Battery
Directive introduce new rules for the production, recycling, and repurposing ofbatteries. The European Union also proposed the Critical Raw Materials Act inMarch 2023, which aims, by 2030, to achieve extraction capacity of 10% of theEuropean Union’s annual consumption of strategic raw materials; processing
capacity for 40%; and recycling capacity for 15%. Objectives also include
diversifying the origin of imported materials to increase supply chain security andresilience, and improving the environmental sustainability of mineral-related
activities.
In the United States, the importance of critical minerals and the preference fordeveloping domestic capacity has been underlined by the stipulation under the
IRA that half of the vehicle subsidy is dependent on meeting the critical mineral
requirement.

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Initiatives to stimulate domestic manufacturing and ensure supply of criticalminerals are also underway in many other countries. Australia is aiming toaccelerate lithium production for both export and domestic downstream
processing. Recent policy developments have included a consultation on theAustralian Made Battery Plan, which sets out an AUD 100 million (Australian
dollars) (USD 65 million) budget proposal for domestic battery manufacturing
projects in Queensland, and on a new Critical Minerals Strategy. Like Chile,
Australia has a free trade agreement with the United States, meaning greatersynergy with the IRA than in countries not covered by such agreements. Argentina
sees an opportunity to build a battery manufacturing industry that would create
2 500 jobs by 2030, and is considering the introduction of a domestic market quotaof 5%, potentially increasing to 20%, to guarantee domestic industry access tolithium. Japan aims to increase domestic production of vehicle batteries to
100 GWh by 2030 under the Green Growth Strategy. In 2022, Japan earmarked
JPY 331.6 billion (Japanese yen) (USD 2.5 billion) to develop materials formagnets and batteries to reduce the dependency on rare earth elements andlithium, including those used for EV applications. In Mexico, a decentralised publicbody, Lithium for Mexico, was created in August 2022, recognising lithium as
strategic mineral and nationalising the value chain, with a target that 50% of
vehicles produced in Mexico will be ZEVs by 2030. Russia is aiming to leverageminerals to develop a battery industry, and for no less than 10% of car production
to be EVs in 2030.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

In 2020-2021, India imported lithium-ion cells worth USD 1 billion, more than 95%
of which were from Hong Kong and China, according to trade data. To reduce
dependency on imports, in 2022 India issued Battery Waste Management Rules,
which aim at recycling or refurbishing all types of batteries, including those of EVs.
The rules also set the goal of increasing the recycled content of EV batteries to
20% by 2030, including for imported products. In February 2023, India announced
its first inferred lithium deposits of 5.9 Mt. 6 If confirmed, this may become a gamechanger for India and for global cell manufacturing.
Other countries are also positioning themselves as potential players in the EV
supply chain: In 2023, Iran claimed to have identified lithium reserves, which if
confirmed could amount to 8.5 Mt, or the second largest such reserves in theworld.

Box 2.1

Promoting electric vehicle adoption beyond targets andsubsidies

Expansion of Low-Emission Zones or similar policies
Low-Emission Zones (LEZs) are increasingly common, particularly in Europe, andthey may encourage EV adoption in the future, provided they are able to address
acceptance and equity issues. London and Milan provide examples of LEZs thathave been in place for several years. In London, the Ultra-Low Emission Zone
introduced in 2021 will expand across all boroughs from August 2023 onwards: avehicle driving in the area without meeting the emissions standards will face a dailycharge of up to GBP 12.5 (USD 15.5). Milan has banned older petrol and diesel
vehicles (based on the engine’s Euro classification) from entering the city during
weekdays, subject to a fine, with only the cleanest vehicles permitted by 2030.
In France, the scope of existing LEZs expanded in 2022 and 2023, with thegovernment requiring the adoption of LEZs in all municipalities with more than
150 000 inhabitants by 2024, eventually covering municipalities in more than 40
regions. Similarly, Spain has mandated LEZs in municipalities with more than
50 000 inhabitants, covering 70% of Spanish cities. In the Netherlands, Amsterdam
is extending its LEZs in 2025 with the goal of emission-free traffic by 2030, as is
Utrecht, and the government aims for at least 30 cities to have implemented a zeroemission zone for logistics by 2030 (e.g. delivery, vans). In Scotland, a LEZ will be
introduced in Glasgow in June 2023, with three other cities following in 2024. In
order to facilitate the change, a scrappage scheme for people living in affectedareas has been launched. Similarly, in Belgium, the LEZs that came into force atthe start of 2023 were paired with a scrappage scheme. Elsewhere, China hascreated national pilot ecological civilisation zones, which are regions for air pollution

The total viable resource will be significantly lower than the inferred resource.

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Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

prevention and control with associated targets for NEV deployment. Although theregulations pertaining to the restrictions applied are not yet all fully defined, they are
expected to have an impact on EV sales.
Interest-free or low-interest loans
Affordability can be a barrier to EV adoption, particularly among lower-income
households, and some governments have sought to facilitate greater uptake byproviding low-interest loans. In 2022, Scotland offered a suite of interest-free loans
to both individuals and businesses for both new and used BEVs and PHEVs. The
current round of funding is fully subscribed. In Australia, the Australian Capital
Territory offers interest-free loans of up to AUD 15 000 (more than USD 10 000),with a repayment period of up to 10 years, to help bridge potential price premiums
relative to ICE equivalents. From 2023 in France, as a two year-trial, interest-freeloans will be offered to lower-income households in LEZs who would like to change
to an EV. Since 2022, the Canada Infrastructure Bank has offered low- or zerointerest loans for the purchase of zero-emission buses, with repayments sourced
from savings generated by the lower operating costs. Slovenia offers subsidisedloans to people wishing to purchase an EV as part of an Eco Fund.

Policy support for electric light-duty vehicles
More ambitious policy-making sets course for zeroemission driving
New EU standards introduce deadlines and increase targets
Over the past year there has been substantial progress towards adopting
legislation in line with reducing emissions in the European Union by at least 55%
by 2030, as outlined in the Fit for 55 package. In March 2023, the European Union
adopted new CO2 standards for cars and vans requiring a 55% and 50% reductionin emissions of new cars and vans by 2030 (compared to 2021), and 100% forboth by 2035. As stated in the regulation, the Commission will also submit a
proposal to allow for the registration of vehicles running exclusively on CO2-neutral
e-fuels after 2035.

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In June 2022, the European Parliament also called for amendments to regulations
regarding the default utility factor for PHEVs, which represents the share of
distance travelled using the battery compared to the distance travelled using theICE. Consequently, from 2025 the utility factor (with its effect on vehicle emissions)will be based on the 2022 ICCT-Fraunhofer study of real-world data rather thanestimates, substantially increasing the assumed emissions. This is expected toGlobal EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

significantly decrease the incentive for carmakers to use PHEVs to meet European
fleet targets. As of 2027, the updated methodology will be based on an even splitof private and company cars, as the latter have been responsible for an evengreater gap between assumed and actual performance. Furthermore, it is
proposed that from January 2027 the utility factor will be changed to reflect thelatest results of on-board fuel consumption monitoring devices.

Tighter Euro 7 regulations expand coverage of emissions
In November 2022, the European Commission proposed new Euro 7 emissions
standards for cars, vans, trucks and buses. The proposed emission standards areintended to be more reflective of real driving conditions, particularly city driving,
and regulate not just tailpipe emissions, but also emissions from brakes and tyres– including for EVs. The standards are also intended to reinforce new stricter air
quality standards proposed in October 2022.
As with the United Nations regulations (see “Globally harmonised technicalregulations for safer and cleaner electric vehicle deployment”), the Euro 7
emissions standards would introduce minimum performance standards for LDV
battery durability of 80% by year 5 or 100 000 km, and 70% from years 5 to 8 or
160 000 km. 7 Also included are nitrogen oxide (NOx) emissions reductions of 35%
for LDVs and 56% for HDVs, and tailpipe particle emissions reductions of 13% for
LDVs and 39% for HDVs. These limits cannot be exceeded before 200 000 km or
10 years of driving, double the previous requirements. They represent an
anticipated cost increase of EUR 90 to 150 (USD 95 to 160) for LDVs, andEUR 2 600 (USD 2 750) for HDVs compared to Euro 6/VI.

Box 2.2

Globally harmonised technical regulations for safer and cleaner
electric vehicle deployment

Technical regulations and safety
In addition to fiscal policies, technical regulations are key enablers of mass
adoption, by ensuring safe, clean and sustainable operation, and thereby increasing
consumer confidence. Alongside representatives from governments, industry andcivil society, the World Forum for Harmonization of Vehicle Regulations, hosted by
the United Nations Economic Commission for Europe (UNECE), develops legallybinding technical regulations on vehicle design and construction.
In 2018, the UN introduced performance-oriented requirements to address potential
safety risks of EVs in both LDVs and HDVs. The requirements are divided into in-

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7
These limits apply to M1 vehicles (passenger cars with up to 8 seats). The limits for N1 vehicles (vans less than 3.5 t) are
75% and 65% respectively.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

use (occupant protection, charging, safety of the rechargeable energy storage
system), and post-crash (electrical isolation, battery integrity etc.) categories.
EV-specific occupant protections have also been included in the five other UN
Regulations dealing with vehicle collisions. Work to improve the 2018 regulation is
ongoing, with experts considering the flammability, toxicity and corrosiveness ofvented gas, energy storage system vibration profile, water immersion, and thermal
propagation. Thermal propagation is of particular importance in light of recent
instances of EV fires, which are extremely difficult to extinguish. The second phaseof this work is expected to culminate in the adoption of an amendment in 2024.
Environmental performance
Similar regulatory activities to aid clean deployment of EVs are ongoing, with27 countries 8 committed to transposing minimum battery durability requirements in
HEVs, PHEVs, and BEVs into their national legislation after the requirements wereadopted by the UN in April 2022. The new provisions require manufacturers tocertify that the batteries will lose less than 20% of their initial capacity over 5 years
or 100 000 km, and less than 30% over 8 years or 160 000 km. They are equal tothe provisions in the proposed Euro 7 regulations, but less stringent than theprovisions adopted in California. The scope of the work is now extending to HDVs,
a sector expected to electrify rapidly in the coming years.
Such initiatives are crucial for increasing the environmental performance of EVs
beyond their low emissions output, easing the pressure on in-demand critical raw
materials needed for their production, and reducing waste from used batteries. A
procedure to measure brake particulate emissions has also been developed at the
UN and has already been included into the Euro 7 proposal. Elsewhere, following
the forthcoming development of a harmonised procedure to determine the carbon
footprint of all vehicle types, a draft proposal from the UN on automotive Life Cycle
Assessment (LCA) is expected to be adopted in 2025.

Greater ambition for US states under Advanced Clean Cars II
In November 2022, the California Air Resources Board approved the Advanced
Clean Cars II (ACC II) rule, which sets a minimum ZEV sales shares for passenger
LDVs ranging from 35% in 2026 to 100% in 2035. 9 Any vehicle sold from 2035
onwards must be a zero-emission vehicle or PHEV. This follows sustained support
for low- and zero-emission vehicles in California in the past decades, such as
through the zero-emission vehicle credits. While the regulation can only take effectafter a waiver is granted to California by the US Environmental Protection Agency,

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8Australia, Canada, China, European Union (representing Cyprus, Finland, France, Germany, Hungary, Italy, Lithuania,
Luxembourg, Netherlands, Romania, Slovakia, Slovenia, Spain, and Sweden), India, Japan, Malaysia, Norway, Korea,
Russia, South Africa, Tunisia, United Kingdom and United States.
9
Includes passenger cars, SUVs, and pickup trucks, but not LCVs, which accounted for 6% of US LDV sales in 2022.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

other states have already followed California’s lead. Vermont, Washington,
Oregon and New York have all adopted ACC II, altogether representing about
20% of US passenger LDV sales. Currently, Massachusetts, Delaware andColorado have also either begun the process to adopt ACC II or have announced
intentions to do so, which would bring the share of sales covered by the rule toalmost 25%.

National plans in many countries pave the way for zeroemission car transport
In 2022-2023, more and more countries proposed policy to accelerate electric car
adoption, either by strengthening existing plans or introducing a support
mechanism for the first time.
In Europe, the United Kingdom brought forward the date to end the sale of fully
ICE cars and vans to 2030, five years earlier than previously announced, with afull transition to 100% ZEV sales by 2035. 10 In March 2023, the government laidout proposed ZEV sales share trajectories for cars and vans to reach the 2035
target.
Greece, which had a previous target of 30% ZEV sales share by 2030,
strengthened its policy to only allow the sale of zero-emission LDVs from thenonwards. In Switzerland a target first established in 2018 for a 15% electric car
sales share by 2022 has been surpassed, reaching 25% in 2022, building onstrong collaboration and investment across around 50 leading organisations
through the Electromobility Roadmap. The new target stands at 50% electric car
sales share by 2025. Italy’s subsidy scheme has also been renewed with a focus
on scrapping older, more polluting ICEs, similar to a scheme in Singapore. Spain
has a similar focus on scrappage, accompanied by support for lower-income
individuals. In Denmark, changes to taxation aim to make EV company cars more
attractive, while in Finland, import and annual taxes for EVs have beensignificantly reduced. Austria renewed its EV subsidy in 2023, applying the samerates as the previous year. 11 Croatia and Cyprus 12 both began subsidising EV
purchase in 2022.

Between 2030 and 2035, new cars and vans can be sold if they have significant zero-emission capability, which would
include some plug-in and hybrid electric vehicles. The definition of significant zero-emission capability will be consulted onlater this year.
11
Rates for commercial applicants have reduced between 2022 and 2023.
12
Note by the Republic of Türkiye: The information in this document with reference to “Cyprus” relates to the southern partof the Island. There is no single authority representing both Turkish and Greek Cypriot people on the Island. Türkiye
recognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is found within the context
of the United Nations, Türkiye shall preserve its position concerning the “Cyprus issue”. Note by all the European Union
Member States of the OECD and the European Union: The Republic of Cyprus is recognised by all members of the United
Nations with the exception of Türkiye. The information in this document relates to the area under the effective control of theGovernment of the Republic of Cyprus.

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Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

In 2022, Canada increased its national ambition for LDV deployment, with current
goals to achieve a zero-emission sales share of 20% by 2026, 60% by 2030 and
100% by 2035. On the provincial level, British Columbia has increased its 2030
target to 90%.
Having funded a charging infrastructure programme since 2020, in February 2022
Australia also started providing competitive grant funding supporting the purchaseof EVs (both light- and heavy-duty) for commercial use. The total funding amounts
to AUD 128 million (USD 89 million) and is a component of the expanded
AUD 500 million (USD 346 million) Future Fuels Fund. In May 2022, New Zealandpublished its first comprehensive emissions reduction plan. It aims for 30% of the
LDV stock to be ZEVs by 2035. Electric cars accounted for over 10% of new sales
in 2022, despite New Zealand only introducing a purchase subsidy in mid-2021.
This also covers imports of used vehicles, given their prevalence in the country,
as well as several non-purchase related incentives.
Japan's Green Growth Strategy, announced in 2021, sets targets to reach 100%
electrification of LDV by 2035, and the 2023 Act on the Rational Use of Energy
tracks and accelerates the targets set under the Strategy.
In EMDEs, governments are also increasing ambition. EVs are viewed as anopportunity to reduce air pollution, mitigate climate impacts and decrease relianceon energy imports. The EV policies being introduced commonly take the form oftax exemptions for EVs, equipment and parts, as well as purchase incentives,
mandates, and deployment targets.

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In Indonesia, government vehicles have been required to be electric since 2022,
and EV purchase subsidies have been put in place from 2023. In Seychelles, theaim is for 30% of new vehicles sales to be electric by 2030 and the forthcoming
National Electric Mobility Strategy will contain a target of 100% of buses to beelectric by 2050. In Panama, 40% of the stock of selected public vehicles are to
be EVs by 2030. Viet Nam has introduced a net zero emissions target for thetransport sector in 2050, aiming to use vehicles powered by 100% electricity andgreen energy, with a ban on the production, assembly and import of fossil fuelpowered vehicles in 2040. Ghana’s recently released strategy contains a target
that 4%, 16%, and 32% of new sales are to be EVs in 2025, 2030, and 2050,
respectively. In addition, countries recently proposing tax-related policies include
Angola, Brazil (following previous tax exemptions for imports of electric cars datingback to 2015), Ecuador, Pakistan, Trinidad and Tobago, Tunisia, Uzbekistan, andViet Nam.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

Purchase incentives are being adjusted in moreadvanced markets
China: local action ramps up as national subsidies phase out
In China, December 2022 saw the end of the national NEV subsidy scheme,
originally aimed for phase-out two years earlier, and following a gradual reductionof national subsidies for NEV purchases since 2017. Meanwhile, with a sales
share of almost 30% in 2022, China’s NEV market has surpassed the country’s
target of a 20% sales share by 2025. The extended vehicle purchase tax
exemption for NEVs will remain as the main national-level financial incentive until
the end of 2023.
Moreover, road transport electrification is stated as a goal in multiple guiding
strategies. To reduce air pollution, China aims to reach a 50% NEV sales shareby 2030 in its “key air pollution control regions”, which combined account for nearly
80% of China’s car market. In addition, China’s national action plan to reachcarbon peaking before 2030 sets out a target for the sales share of NEVs to reacharound 40% by 2030.
Meanwhile, targets and favourable policies at the regional level continue to play
an important role. In line with the country’s national action plan, 18 Chinese
provinces currently have explicit NEV targets as part of carbon peaking policies,
aiming for 40% of NEV sales share by 2030, with Tianjin at 50%. Regional sectoral
strategies and local 14th Five-Year Plans also set more ambitious targets in somecases, such as Shenzhen’s aim to achieve a 60% NEV sales share by 2025, andShanghai’s BEV sales share target of 50% by 2025. Several regional governments
announced local incentives at the beginning of 2023; for example, Zhengzhou andWuxi are providing vouchers for NEV purchases, while Beijing and Shanghai bothannounced incentives to replace an ICE vehicle with a NEV.

The focus and level of incentives are changing as markets
matureIn addition to China, many other countries in which EV markets are maturing are
now also reducing or changing the nature of purchase incentives:
In 2023, Norway reintroduced value-added tax (VAT) on EVs costing more than
NOK 500 000 (Norwegian kroner) (USD 52 000), meaning only the mostexpensive models would see price increases. Norway proposed to replace the
VAT exemption with a new subsidy scheme, though few details have beenreleased to date. Other advantages and incentives have also been gradually
reduced.

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Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategyIn the United Kingdom, subsidies for electric cars ended in 2022, having exceeded
a 20% sales share, after the available grant was gradually reduced between 2016
and 2021. 13 Subsidies remain in place for electric taxis, vans and trucks, as well
as for company cars with new tax exemptions, and the focus on charging is also
increasing.



Germany and Ireland both lowered purchase incentive levels in 2023.

The Netherlands has been reducing premiums year-on-year, with a EUR 400(USD 420) reduction between 2022 and 2023.



Sweden had first planned to tighten the cap on purchase incentives for electriccars from SEK 70 000 (Swedish kronor) (USD 7 000) in 2022 to SEK 50 000(USD 5 000) in 2023, following an increase from SEK 60 000 (USD 6 000) in early2021. Then, in light of closer price parity between electric and ICE cars, Sweden
announced that the purchase incentive would expire from November 2022
onwards.

After increasing the incentive in order to boost sales during the Covid-19
pandemic, France reduced incentives from EUR 7 000 (USD 7 400) in 2021 to
EUR 6 000 in 2022 (USD 6 300) and EUR 5 000 in 2023 (USD 5 300). However,the purchase incentive for lower-income households was increased fromEUR 6 000 (USD 6 300) in 2022 to EUR 7 000 (USD 7 400) in 2023 in order toimprove equity of access to EVs.



In Korea, the government promotes EVs by applying higher subsidy amounts tovehicles with greater fully electric range. The maximum passenger car incentives
slightly decreased from KRW 7 million (Korean won) (USD 5 400) to KRW
6.8 million (USD 5 300) in 2023, though consumers can benefit from local
subsidies as well. For electric LCVs, the incentives per vehicle decreased fromKRW 14 million (USD 10 800) to KRW 12 million (USD 9 300) in 2023. However,with around 30% more passenger cars and commercial vehicles subsidised, total
government funding for electric LDV subsidies increased from KRW 1 561 billion(USD 1.2 billion) in 2022 to KRW 1 676 billion (USD 1.3 billion) in 2023.
Additionally, in April 2022, Korea ended their policy of free light commercial

vehicle (LCV) registration, yet has remained a leader in electric LCV deployment
in 2022, averaging 27% of sales over the year.


In 2022, Japan increased their EV subsidy scheme to JPY 70 billion(USD 530 million) – doubling support for BEV purchases up to JPY 850 000(USD 6 500) and JPY 550 000 (USD 4 200) for PHEV.

Stronger policy preference for fully battery electric options
Recent developments indicate possible strengthening of policy support for battery
electric cars over PHEVs. In Europe, for example, Belgium, Finland, theNetherlands, Portugal and the United Kingdom supported BEVs over the 201913

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The grant was first available in 2011 and capped at 25% of the vehicle cost (to a maximum of GBP 5 000 (USD 6 170));
this was then set to GBP 4 500 (USD 5 550) in 2016, reducing between GBP 500 and GBP 1 000 (USD 620 and 1 230) per
year thereafter.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

2022 period, but not PHEVs. In 2022, Ireland decided to end subsidies for PHEVs,
followed in 2023 by Germany.
In China, Shanghai offers purchase subsidies for BEVs but not for PHEVs, andseveral Indian states have set BEV-specific targets without including PHEVs. The
United States and Canada have maintained the same level of support for PHEVs
since 2019. In California, however, a 40 mile (65 km) minimum fully electric range
is being introduced for PHEVs. The IRA is now also stipulating a minimum of
7 kWh battery capacity to qualify for subsidies, thereby excluding low-range
PHEVs.

USD equivalent

8 000

25%

7 000
20%

6 000
5 000

15%

4 000

BEV share of LDV sales

Figure 2.3. Battery electric vehicle incentives and the battery electric vehicle share oflight-duty vehicle sales, 2018 - 2022

10%

3 000
2 000

5%

1 000
0

2018
Canada

2019

2020

2021

FranceUnited Kingdom

China

2022

0%

Belgium
IEA. CC BY 4.0.

Note: USD = US dollar; BEV = battery electric vehicle; LDV = light-duty vehicle. The dashed lines represent the battery
electric LDV sales share in each country. Subsidy values are representative of a vehicle with a 350 km range with apurchase price less the upper limit designated by the national scheme. The incentive level shown does not include
scrappage bonuses or bonuses based on individual financial circumstances. Values are not adjusted for inflation or
currency fluctuations. In France and the United Kingdom, the subsidy schemes were adjusted during the calendar year,with the UK subsidy ending in June 2022; the values shown represent the subsidy level at the beginning of the year. For
Belgium, only the subsidy in Flanders is represented.
Source: IEA analysis based on announced policies.

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China, the United Kingdom, and Belgium have all reduced and/or ended private passenger
car subsidy schemes and still see shares continue to grow. Canada and France havemaintained subsidies to encourage further adoption.

Global EV Outlook 2023
Catching up with climate ambitions

Box 2.3

Policy developments and corporate strategy

Emerging markets and developing economies (EMDEs) target
electrification of transport in their Nationally Determined
Contributions

Nationally Determined Contributions (NDCs) generally contain aspirational
language and few quantitative or qualitative targets. Including specific targets
demonstrates a degree of confidence in a country’s ability to meet its stated goal. In
2022, 19 parties updated their NDCs ahead of a UN synthesis report in October
2022. 14 It showed that 41% of NDCs, for around 80 countries, included electrificationof road transport as a mitigation measure.
In this context, NDC submissions from 50 key EMDE markets were analysed toascertain if - and to what extent - electrification of transport has become part of
EMDEs’ mitigation strategies. Collectively, these EMDEs account for over 40% of
global LDV sales and almost 90% of LDV sales in all EMDEs.

Number of countries

Electric vehicle ambitions and targets in emerging markets and developing
economies
14
12
10
8
6
4
2
0

NDC

Non-NDC LDV only Bus only LDV and Otherbus
EV targets/
NDC
ambitions
EV targets/ambitions

LDV

Bus

LDV and Other
bus
Non-NDC
EV targets/ambitions
IEA. CC BY 4.0.

Note: NDC = Nationally Determined Contribution; EV = electric vehicle; LDV = light-duty vehicle.
Source: IEA analysis based on announced policies.

Analysis of the NDC content shows that only Trinidad & Tobago and Nicaragua havespecific transport sector emission reduction targets, but a further 12 countries
spread across Latin America, Central America, Africa, and Asia, making up about
0.9 million annual LDV sales, have specific EV targets or ambitions. Of these, four
countries have EV ambitions or targets for both LDVs and buses, three countries
have LDV targets only, and four others only have bus targets. In addition, two Africancountries (Mauritius and Rwanda), while not having any specific EV target, haveidentified vehicle electrification as a key strategy and are monitoring adoption
metrics.

13 more countries have updated their NDCs since the synthesis report of 23 September 2022.

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14

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

Seven countries (contributing about 31% of global LDV sales), including China,
Mexico and Indonesia, have EV targets and ambitions set outside of their NDCs aspart of separate national EV plans.

Policy support for electric heavy-duty
vehicles
New EU CO2 standards for trucks and buses could be a
step-change
The European Commission released proposed revisions of the regulation on HDVemissions in February 2023. The scope of the proposed regulation includes
smaller trucks, city buses, long-distance buses, and trailers, to cover 95% ofsectoral emissions, up from about 70% currently. This demonstrates a step-up in
ambition: the International Council on Clean Transportation (ICCT) estimates thatthe new regulations could achieve sectoral emissions reduction of over 75% by
2050 relative to 2020.
The revisions would increase targets for CO2 emissions reductions to 45% by2030 relative to 2019, 65% by 2035, and 90% by 2040. Furthermore, all city busesshould be ZEVs by 2030. Compliance will be measured separately for passenger(bus and coach) and freight vehicles via a system of credits and debts settled at
the end of five-year periods between 2025 and 2040. Additionally, the definition of
ZEV applied is changing, increasing from 1 gCO2 per vehicle-km to
5 gCO2 per tonne-km (tkm) to allow for dual fuel. Trading between economicallylinked entities (e.g. between brands at the same parent company) is allowed tohelp meet targets. The minimum range of long-haul trucks is defined as 350 km,
and financial penalties are applied for non-compliance.

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Several European Union member countries are strengthening support for zeroemission heavy transport in national plans. Germany has among the highest truck
purchase subsidies in Europe, with 80% of additional costs of the vehicle and/or
the charging infrastructure covered. Ireland’s updated Climate Action Plan
includes a target of 700 low-emission heavy-duty trucks by 2025, a 30% zeroemission heavy-duty truck sales share by 2030, and provisions for HDVs. Irelandalso introduced its first electric bus target: 300 by 2025. In Denmark, from 2025
onwards, taxes on trucks will be based on CO2 emissions, sending a clear policy
signal to operators. In April 2022, Italy made subsidies available for trucks
between 3.5 and 12 t, and in the same month, the Netherlands introduced a wideranging scheme covering vehicles from small trucks up to tractor units(4.25-18+ t). Croatia implemented a scheme with a similarly wide scope in June.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

In total, ten European countries now also have a subsidy scheme for HDVs, fiveof which were introduced in 2022/23.

Increasing inclusion of HDVs in targets and policy
incentives
In the United States, the IRA provides USD 1 billion for vehicles and infrastructure
specifically for HDVs, including subsidies, and the state of California’s funding
package for charging infrastructure will see 70% of funds dedicated to charging
for HDVs. In the United Kingdom, HDVs remain included in subsidy schemes eventhough support for electric cars has been phased out. Similarly, Australia’s subsidy
scheme under the Future Fuels Program specifically targets HDVs and HDV
charging with dedicated funding that is not available for LDVs.
Several countries have specific targets for zero- or low-emission heavy transport.
In New Zealand, the aim is to reduce emissions from freight transport by 35% by2035. Norway aims for virtually zero-emission goods distribution by 2030 in the
biggest urban centres. Tianjin (China), aims to have 80% NEVs in public transport,
rental, logistics and delivery vehicle sales by 2025, while Viet Nam’s net zerotransport by 2050 goal includes HDVs. Japan aims to introduce 5 000 electric
HDVs by 2030, with a JPY 13.6 billion (USD 120 million) plan to electrify HDVs
and taxis. Some countries are also introducing financial support for electric truck
purchases for the first time. In July 2022, Canada’s Incentives for Medium- andHeavy-duty Zero-Emission Vehicles (iMHZEV) programme began to offer
incentives up to CAD (Canadian dollars) 200 000 (USD 160 000) towards thepurchase or lease of ZEV trucks of various categories.

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With respect to electric buses, overall model availability is higher and costcompetitiveness better than trucks, making them generally more affordable.
Indeed, several EMDEs have begun including ambitious deployment targets forelectric buses in national plans, often ahead of LDV targets. For example, in April
2022, Panama announced the aim of transitioning towards electric public
transport, reaching a 10% share by 2025, 20% by 2027, and 33% by 2030. In
February 2023, Tamil Nādu in India also introduced a target for 30% of their bus
fleet to be electric by 2030 as part of a broad strategy to promote EVs andsupporting infrastructure. In advanced economies, grants for electric buses havebeen introduced in Canada. The United States also provides substantial funding
towards the purchasing or leasing of electric buses: up to 85% of vehicle costs
and up to 90% of infrastructure costs.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

Figure 2.4. Heavy-duty vehicle policy coverage in selected key countries
Japan(0.0%)

Norway(10.7%)

Italy(0.5%)

Finland(7.8%)
Denmark(7.1%)

United States(0.6%)

Canada
(1.1%)

China(6.5%)New Zealand(1.4%)

United Kingdom(2.7%)

Netherlands(1.6%)

France(2.5%)
Germany(1.8%)

Global MoU

Bus targets

Chile(2.5%)

Austria(2.0%)

Truck targets

Financial incentives

Infrastructure support

IEA. CC BY 4.0.
Note: Numbers in parentheses are the electric HDV (bus and truck) sales shares in each country in 2022. Grey sections
indicate that a country does not have policy or commitment addressing this specific area. HDV targets are separated as it iscommon for countries to have explicit targets for one category and not both. A country is considered to have infrastructure
policy only where HDV charging is explicitly mentioned. Similarly, “truck targets” refers to explicit targets for either vehicle
sales/stock volumes or shares.

Countries are supporting deployment of electric trucks and buses, from less firm
commitments such as signing pledges, all the way to funding dedicated charging
infrastructure.

Policy support for EV charging infrastructure
Support is gradually shifting from vehicles to charging insome markets

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In countries where electromobility is more well developed, focus is shifting towards
supporting charging infrastructure and moving away from more expensive private
vehicle subsidisation. In the United Kingdom, for example, in June 2022 thegovernment announced its intention to refocus on charging, after winding down
the electric car subsidy programme. Almost GBP 1.6 billion (USD 2.1 billion) ofgovernment funding has been committed to supporting the EV Infrastructure
Strategy, which set an expectation of 300 000 public chargers being installed by
2030. The UK government is also working to increase the availability of on-street
chargers, particularly in residential areas where off-street parking is not available.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

With charging identified as the top consideration for consumers in China,
Guangdong, Hunan and Shanghai, among other regions, have implemented
subsidies for the deployment of charging points. Shenzhen is targeting 43 000 fast
chargers and 790 000 slow chargers by 2025, and Chongqing 240 000 chargers.
Germany, which is also winding down its vehicle subsidy scheme, has at the sametime supplemented the budget for fast chargers. In Switzerland, the government
extended its Electromobility Roadmap in 2022, with the goal of achieving 20 000
public charging stations by 2025 to support the 50% EV sales share target. Having
launched a vehicle subsidy scheme in 2021, Poland is now also subsiding
charging infrastructure. Finland and Denmark have recently committed to greater
support of charger roll-out, as has Ireland, which released a revised ZEV plan that
focuses on public charging.

Additional support for charging infrastructure aims toservice different road transport segments in moresettings
Some countries are choosing to fund infrastructure development in advance oflarge-scale adoption of EVs. One notable example is Australia, which has had
grants to fund charging prior to 2020 and a dedicated infrastructure funding
programme since 2020, and began to provide support for electric HDVs in 2022,
in conjunction with charging. 15 The first period of Viet Nam’s strategy includes
building a charging network, without a focus on subsidising vehicles. Similarly,
Bulgaria’s efforts to promote EVs are starting with charging. In India, targets andincentives are being developed at the state level to supplement national ambitions,with the Tamil Nādu government set to subsidise the installation of 750 chargers.
Under the Green Growth Strategy, Japan plans to construct 150 000 publicly
accessible charging stations by 2030: 30 000 of which will be fast charging.
In the United States, more than USD 1.5 billion has been approved under the
National Electric Vehicle Infrastructure (NEVI) Formula Program to help build EV
chargers covering approximately 75 000 miles of highway across the country.
National standards to qualify for the funding were adopted in 2023 with the aim ofcreating a convenient, affordable, reliable, and equitable network of chargers
throughout the country. These standards will harmonise payments and pricing
information for charging, and aim to ensure minimum numbers and types ofchargers, including fast charging, to support achievement of the target of installing
500 000 chargers no more than 80 km apart along major routes by 2030. In
addition, under the IRA, as of January 2023, vehicle charging infrastructure
installations are eligible for a tax credit of up to USD 100 000, and consumers who

This funding specifically excludes private vehicles and cannot be used to fund direct costs for LDVs.

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15

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

purchase a home charger can receive a tax credit of up to USD 1 000. California,
often a front-runner in EV policy development, committed additional funding of
USD 1 billion of funding to charging infrastructure in November 2022. Both at anational level and under California’s funding scheme, there is financial support tobuild out medium- and heavy-duty truck charging stations.
Canada recently increased funding available through the Zero Emission Vehicle
Infrastructure Program by an additional CAD 400 million (USD 310 million) toextend the programme through March 2027. The programme supports the
deployment of public and private chargers, including at multi-unit residentialbuildings and workplaces, as well as funding strategic infrastructure projects forurban delivery and fleet applications. Furthermore, the Canada Infrastructure
Bank announced in 2022 that it will invest CAD 500 million (USD 385 million) inlarge-scale charging infrastructure. This is all to support the government’s targetof 84 500 chargers deployed by 2029.
In 2021, the European Commission proposed the Alternative Fuels Infrastructure
Regulation (AFIR) in place of the 2014 Directive. As of March 2023, the European
Council and European Parliament have a provisional agreement for the AFIR,
which includes requirements for total power capacity based on the size of the light
EV fleet, and coverage requirements for the trans-European network-transport(TEN-T) with respect to light- and heavy-duty vehicles. An agreement between theEuropean Investment Bank and the European Commission will make over
EUR 1.5 billion available by the end of 2023 for alternative fuels infrastructure,including for EV charging. Grants to support EVSE deployment are also available
from the Connecting Europe Facility (CEF) for Transport programme.

Policy incentives for battery swapping in China and India
Battery swapping policies are gaining popularity, as the technology offers apotential solution to concerns about range, charging times, and upfront costs
faced by EV owners. The two countries most actively pursuing battery swapping
are China and India. In China, battery swapping is being used for passenger carsand more recently has also been used for trucks. In India, battery swapping
focuses on two- and three-wheelers and is most often proposed for the ecommerce and hyper-local delivery services sector in which variable routes andhigh daily mileages are a concern. However, widespread implementation is stillhindered by high start-up costs and a lack of standardisation.

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The first Chinese standard was published in 2021, and later that year 11 cities
were chosen for technology demonstration pilots, with the goal of refining thestandards, but this has not yet been completed. The relevance of battery swappingin China is further evidenced by its inclusion in the national strategy for the NEV
industry. Cities and provinces such as Shanghai, Beijing and Chongqing alsoGlobal EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

provide financial support for battery swapping, often as a part of their NEV
promotion plans or subsidy schemes for charging infrastructure. Chongqing, forexample, aims to build over 200 battery swapping stations and deploy more than
10 000 battery swapping-enabled EVs by 2023, while Beijing aims to have 310 by2025. At the end of 2022, China had almost 2 000 battery swapping stations.
In order to promote battery swapping, India first amended the demand incentive
scheme (FAME II) to allow the sale of vehicles and batteries separately to electric
two- and three-wheelers, with the aim of reducing upfront costs. However, thisresulted in ambiguity around subsidy disbursement and eligibility, and incidentally
increased the applicable tax rate. To resolve these issues, in 2022 India
announced a draft battery swapping policy that stipulates the minimum technicaland operational requirements, as well as clarifications on financial issues. A
number of state governments in India have also announced support for battery
swapping. For example, the Delhi government stipulates an even distribution ofsubsidy between the vehicle owner and energy operator and an allocation of land
for the establishment of swap points with favourable conditions. Other states areproviding up to 25% capital subsidy for stations that meet certain eligibility criteria.
The national government envisages the roll-out of the swapping stations in twophases. In Phase 1, all metropolitan cities with a population of more than 4 million
will be prioritised, followed by Tier-II cities (with a population greater than
0.5 million) in Phase 2.

A multiplying number of international
initiatives and pledges
The number of multilateral initiatives and pledges focusing on electromobility has
increased rapidly in the last decade. This reflects government appetite around theworld to accelerate the transition to zero-emission transport, and is anencouraging sign that international collaboration has a strong role to play in global
decarbonisation. The multiplication of multilateral initiatives is a phenomenon also
observed in other segments of the clean energy sector, such as hydrogen andrenewables. To increase the impact of such initiatives, it is important for member
countries to ensure that the schemes complement each other and to identify where
specifically in the EV value chain they should focus.

Accelerating to Zero

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The overarching goal of the Accelerating to Zero (A2Z) coalition launched at theConference of the Parties (COP 27) is for all sales of new cars and vans globallyto be ZEVs by 2040, and by no later than 2035 in leading markets. The coalitionbuilds on the Zero-Emission Vehicles Declaration, which received some
130 signatures on launch at COP26, and now has 223 signatories. These include

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

30 governments in advanced economies, 16 11 governments in EMDEs, 17
73 local/regional governments, 14 automotive manufacturers, 47 fleet owners andoperators, 15 investors with shareholdings in automotive manufacturing,
2 financial institutions and 31 other signatories. The 40 governments together
accounted for almost a quarter of annual LDV sales worldwide, and close to 20%
of electric LDV sales in 2022. Some subnational government or non-governmental
signatories have also set specific, more ambitious goals, such as regional or city
authorities and fleet owners and operators aiming to electrify their fleets by asearly as 2030.

Zero-Emission Government Fleet Declaration
In 2022, recognising the catalytic role that national governments can have via
demand signals and leadership, a group of nine countries 18 committed to the ZeroEmission Government Fleet Declaration. They aim to reach 100% zero-emission
cars and vans in government fleets, with an additional aspiration of 100% zeroemission trucks and buses, by no later than 2035. Exact timelines vary by country.
For example, 75% and 100% of acquisitions should be electric by 2025 inAustralia 19 and Israel, respectively; 100% of acquisitions by 2027 in the
United States; and 100% of the LDV stock should be zero-emission by 2030 in
Canada.

Zero-emission Vehicle Emerging Markets Initiative
In 2022, at COP27, the World Business Council for Sustainable Development(WBCSD), the United States and the United Kingdom launched the Zero-Emission
Vehicle Emerging Markets Initiative. It aims to enhance co-operation between
public and private actors in EMDEs to accelerate the transition to zero-emission
road transport. Specifically, the initiative opened a dialogue between governments
and corporates on public support and private investment to achieve ZEV
deployment targets in EMDEs, with the view to facilitate and announce
agreements at COP28. It gathers companies that have announced a combined
USD 50 billion in investment and committed to deploy over 2 million EVs in
EMDEs by 2030. In February 2023, the first dialogue of the series took place inIndia, launching a country pilot programme there.

16
Austria, Azerbaijan, Belgium, Cabo Verde, Canada, Chile, Croatia, Cyprus, Denmark, El Salvador, Finland, France,
Greece, Iceland, Ireland, Israel, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, New Zealand, Norway, Poland,
Slovenia, Spain, Sweden, the Holy See, and the United Kingdom.

Armenia, Dominican Republic, Ghana, India, Kenya, Mexico, Morocco, Paraguay, Rwanda, Türkiye, and Ukraine.
Australia, Canada, Germany, Israel, Netherlands, New Zealand, Norway, Sweden, and the United States.
19
Includes leases.

17

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18

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

Global Memorandum of Understanding on Zero-Emission
Medium- and Heavy-Duty Vehicles
In 2021, the Dutch government and Drive to Zero programme launched the Global
Memorandum of Understanding (MoU) on Zero-Emission Medium- and HeavyDuty Vehicles, through which signatories commit to work together to achieve
100% ZEV bus and truck sales by 2040, with an interim goal of 30% by 2030. In
2022, Aruba, Belgium, Croatia, Curaçao, Dominican Republic, Ireland,
Liechtenstein, Lithuania, Sint Maarten, Ukraine, and the United States all signed
the MoU. This brings the total number of countries and territories among thesignatories to 27, 20 accounting for over 15% of total annual sales of new mediumand heavy-duty vehicles worldwide. The MoU also has endorsements fromregional government, manufacturing, fleet owners and operators, among others.

Greening Corporate Fleets
The European Commission committed to promote commercial use of zeroemission vehicles through a Greening Corporate Fleets initiative in 2023. In an
open letter to the Commission shared by Transport & Environment, a campaign
group, 30 private and state-owned companies, as well as industry groups, called
for the Commission’s initiative to include a binding target that by 2030 all new
corporate LDVs should be ZEVs. The companies include fleet owners andoperators and EV infrastructure developers.
The letter was also signed by the EV100 campaign, which itself now has 130
member companies. EV100 aims by 2030 to switch all fleet vehicles under 7.5 t
to EVs and to install charging infrastructure for employees and customers. In total,
EV100 members have now committed to electrify nearly 725 000 vehicles in theirown fleets, and over 5 million leased vehicles.

EV100+The EV100+ campaign was launched in 2022 by the Climate Group, theoriginators of the EV100 aimed at LDVs. Signatories of the EV100+ campaign
commit to transition their fleet of vehicles over 7.5 t to zero-emission by 2040 inOECD markets, China and India. Founding members include a few corporate fleet
owners or users.
Recent actions included setting up a broader coalition of truck makers, transport
operators, shippers and retailers, energy providers and infrastructure operatorsand calling for ambitious targets in the (then upcoming) EU HDV CO2 regulations,

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20
Previous signatories are Austria, Canada, Chile, Denmark, Finland, Luxembourg, Netherlands, New Zealand, Norway,
Portugal, Scotland, Switzerland, Türkiye, United Kingdom, Uruguay, and Wales.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

such as a binding ZEV target for 2035 with only limited exceptions, and interim
targets of 30% emissions reduction by 2027, and 65% by 2030. The call was also
signed by CALSTART. EV100+ also signed a similar open letter by Transport &Environment, demonstrating their alignment on the issue.

Electrification plans by original equipment
manufacturers (OEMs)
Voluntary announcements of EV targets have become increasingly common
across the automotive industry. Targets may be formulated in terms of total sales
volumes, as sales shares, or as an ambition to transition all sales of the company
or of a certain brand to all-electric. As shown in Prospects for electric vehicle
deployment, these targets often exceed not only regulatory requirements (asreflected in the Stated Policies Scenario), but also government ambitions (asreflected in the Announced Pledges Scenario).
However, manufacturers’ targets are non-binding and still often focus only on
leading EV markets. Indeed, it is probably no coincidence that the most ambitious
targets are for the European market, where the newly amended CO2 emission
standards would mean that all new cars and vans will be zero-emission by 2035.
Major new OEM announcements have been made at the global level andregionally in 2022-2023. Several Chinese OEMs recently announced EV targets;in contrast with OEMs based in the rest of the world, Chinese car manufacturers’
targets are generally shorter-term and tend to be well within reach of current NEV
market shares.

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In addition, automakers continue to invest increasing sums in electrification anddigital technologies. Just seven automakers, which were collectively responsible
for nearly half of LDV sales in 2022, have capital expenditures of more than
USD 55 billion on emerging automotive technologies since 2019, including for
manufacturing facilities.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

Billion USD

Figure 2.5. Annual CAPEX and R&D spending commitments on EVs and digitaltechnologies by selected automakers, 2019-2022
20

8%

15

6%

10

4%

5

2%

0

Volkswagen

Ford

ToyotaGeneral Motors

Stellantis

Annual CAPEX and R&D spending on EVs and digital technologies

Mercedes-Benz

Nissan0%

Share of revenues (right)

IEA. CC BY 4.0.
Notes: CAPEX = Absolute capital expenditures. R&D = Research and development expenditures. Estimates based oncompany commitments for CAPEX and R&D spending and average spending over 2019-2022.
Source: IEA analysis based on data from BNEF and Bloomberg.

Major carmakers are committing up to 50-70% of CAPEX and R&D budgets to electricvehicles and digital technologies.

Automakers’ electrification targets for LDV since 2022
Automaker

TargetRegionGroup / Brand

Ford

600 000 BEV sales by 2026

EuropeGroup

Volkswagen

Toyota

Mazda
Honda

NissanMitsubishi

400 000 EV sales from 2022-24;
1 million EV production capacity inNorth America
2025
Targets fully electric production by
Europe2033 (brought forward by two years)
1 500 000 BEV sales; introduce
10 additional models by 2026;
Globalcommitted to a multi-pathway approachto reduce CO2, including continuing
development of FCEVs and PHEVs
Expects at least 25% of sales globally
Globalto be BEV in 2030
Aims to launch 30 EV models globallyby 2030, with production volume of
Globalmore than 2 million units annually
Updated global target to 44% EV sales
by 2026 (with regional subtargets for
GlobalEurope, Japan, China, and the UnitedStates) and to 55% EV sales by 2030
Plans for 100% of EV sales by 2035
and 50% EV sales by 2030 in their
GlobalEnvironmental Targets 2030

PAGE | 90

Group
Brand

Group

Group
Group

Group

Group

IEA. CC BY 4.0.

General Motors

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

Automaker

TargetRegionGroup / Brand

Porsche80% of sales to be electric by 2030

EuropeBrand

GlobalGroup

GlobalBrand

BMW Group
Mini and RollsRoyce

Cumulative sales of over 2 million EVs
by the end of 2025; EV sales shares of
30% by 2025, 50% by 2030
Aims to have fully electric line-up by2030

LanciaAll new model launches from 2026 tobe electric; to sell 100% EVs by 2028

GlobalBrand

JaguarAims to go all-electric by 2025

GlobalBrand

Land Rover

Aims to go all-electric by 2036

GlobalBrand

BYD

Ceased ICE vehicle production; hasproduced only EVs since March 2022

Global

Brand

Geely

600 000 EV sales over this year

Global

Group

China

Group

China

Group

China

Group

Annual sales of 1 million NEVs by 2023
SAIC-GM-Wuling including small EVs; 40% NEVs in total
sales by 2025
NEVs to make up 1 million of 3 million
BAIC Groupin total sales in 2025
Half of its total 1 million sales target by
FAW Group2025 to be NEVs; 1.5 million vehicles(mostly NEVs) sold by 2030

Automakers aim to reduce emissions throughout the
supply chain
In addition to goals to electrify vehicle production and sales, major automotive
groups have set corporate decarbonisation targets.

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Eight major automotive groups that collectively accounted for more than 40% of
LDV sales in 2022 – BMW Group, Ford, General Motors, Mercedes-Benz, Renault
Group, Toyota, Volvo Cars, and VW Group – have joined the Science-Based
Targets initiative, which defines a common framework and path to reduce
emissions in line with the Paris Agreement. The automotive groups have set
targets for LDVs to reduce Scope 1 and 2 GHG emissions (i.e. coming fromsources controlled or owned by an organisation, and indirect emissions associatedwith the purchase of electricity, steam, heat, or cooling) by 50%-80%, relative torecent benchmarks, as well as certain Scope 3 emissions by 30%-50%, all in the2030-2035 timeframe (Figure 2.8). Within Scope 3, the most commonly set targets
include only category 11 emissions, which covers those incurred in the fuel supply
chain and use of fuel to power vehicles produced by the car company.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

Figure 2.6. Automakers’ commitments under the Science-Based Targets initiative
Scope 1 and 2 CO2 reduction target in Science-Based Targets initiative%

BMW Group
ToyotaVolvo cars

0-20

General Motors
Mercedes-Benz
VW Group-40

Mercedes-Benz(underneath)

-60
-80

Renault Groups
General Motors

-100

2010

2015

2020

2025

2030

2035

BMW Group

Ford

General Motors

Mercedes-Benz

Renault Group

ToyotaVolvo cars

VW Group

CO2 reduction ratio (% per vehicle km)

Scope 3 category 11 CO2 reduction target in Science-Based Targets initiative
BMW Group
Ford
ToyotaVolvo cars

0
-20
-40

General Motors
Mercedes-Benz
VW Group

-60
-80
-100

2010

2015

2020

2025

2030

2035

BMW Group

Ford

General Motors

Mercedes-Benz

Renault Group

ToyotaVolvo cars

VW Group

IEA. CC BY 4.0.
Note: Double or triple circles show overlapping dots; Mercedes-Benz Group’s Scope 1 and 2 targets align closely withthose of VW Group and their Scope 3 targets align closely with Renault Group’s targets. BMW Group, General Motors, andToyota all include biogenic emissions and removals from bioenergy feedstocks in their targets. Toyota’s target includes
LCVs.

Eight major automotive groups, collectively accounting for more than 40% of light-duty
vehicle sales, have committed to decarbonisation targets through the Science-Based
Targets initiative. Commitments include Scope 1 and 2 as well as Scope 3 emissions.

PAGE | 92

IEA. CC BY 4.0.

Automakers are also announcing their own corporate net zero pathways. BMW
Group, Ford, Geely, General Motors, Honda, Hyundai, Mazda, Mercedes-Benz,

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

Nissan, Renault Group, Stellantis, Toyota, Volvo Cars, and VW Group have set
targets for carbon neutrality from 2038 through 2050. Collectively, thesecompanies accounted for around 60% of global light-duty vehicle (LDV) sales in2022. These corporate ambitions differ in terms of scope, reporting, and thedegree to which they are incorporated into corporate governance, strategy, andfinancial decisions.
Figure 2.7. Automakers’ emissions reductions for Scope 1, 2, and 3 emissions andcorporate net zero emissions targets%

0

Renault
Group

Stellantis

-20

-40

General Motors
Volvo cars

-60

-80

Hyundai
Geely

Mercedes-Benz
-100

2010

2020

2030

2040

BMW Group
NissanHonda
Mazda
ToyotaFord
VW Group
2050

IEA. CC BY 4.0.
Note: Dots on the y-axis indicate dates of corporate net zero emissions targets, and so do not necessarily reflectaccounting across scopes 1, 2, and 3.
Source: IEA analysis based on official company announcements.

Various automakers, collectively comprising around 60% of the light-duty vehicle market,
have announced emission reduction targets.

Global spending on electric cars continues toincrease

PAGE | 93

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Global spending on electric cars was up 50% in 2022 relative to 2021, reaching
about USD 425 billion. Most of this was directly spent by consumers when buying
a vehicle, while governments spent around USD 40 billion through direct purchase
incentives. These include subsidies and tax deductions such as VAT exemption,and bonuses related to weight, CO2 emissions or range. The increase in global
spending on electric cars means that carmakers – including incumbents – aregenerating more revenues from EV sales, and particularly from SUVs and large
car models, thereby progressively helping to reduce reliance on ICE sales tofinance EV manufacturing, R&D and new model development. While there is stilla long way to go, this is an important step for EV growth and the transition to fully
electrified road transport.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

Over the 2017-2022 period, the share of government spending in total spending
decreased from over 20% to just under 10%. On a per-vehicle basis, government
spending decreased from around USD 9 000 per electric car in 2017 to USD 4 000
in 2022, as sales increased more quickly than government spending. In 2023 andbeyond, governments in major EV markets are gradually phasing out subsidies forelectric cars, suggesting government spending will decrease in those markets.
However, incentives in markets where adoption has been lower to date, including
in EMDEs such as India, Indonesia and Thailand, could push overall government
spending up.
In both China and Europe, government spending has increased significantly since2017, especially in the wake of the Covid-19 pandemic. In China, government
spending dipped in 2019-2020 but caught up quickly afterwards: it doubled
between 2020 and 2021, and increased by nearly 70% in 2022 relative to 2021,
exceeding USD 22 billion. In Europe, government spending boomed in 2020 andcontinued increasing through 2021 (up 50% year-on-year) and 2022 (up 20%),
totalling more than USD 15 billion in 2022. In China, purchase incentives, which
are based on driving range, have been decreasing. Although the average rangeof electric cars sold in China has been increasing, and accordingly more models
have become eligible for subsidies, per-unit government support has been steadilydecreasing, standing at around USD 4 000 in 2022. The majority of public support
for electric cars comes from the vehicle purchase tax exemption rather than thesubsidy. In Europe, per-unit support by governments has remained steady ataround USD 6 000 over the 2017-2022 period, but could drop in 2023 and futureyears as subsidies decrease in major markets such as Germany, the United
Kingdom and France.

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Meanwhile, federal government spending in the United States has remained much
lower than that in other major markets in the past few years, especially as majorcarmakers – mostly Tesla and General Motors – reached the cap on further
subsidies. However, it increased from below USD 1 billion in 2020 to almost
USD 2.5 billion in 2022 as more electric cars that are eligible to subsidies weresold than in previous years. While aggregate public support increased
significantly, the IRA changed eligibility requirements for sales taking place
between mid-August and end-2022. The IRA aims to promote EV manufacturingin North America, and as such the list of vehicles qualifying for subsidies shrankin the second half of 2022. Furthermore, while carmaker caps have been removed
in 2023, they remained in place throughout 2022. As a result, public spending ona per-unit basis dropped from more than USD 3 000 in 2021 to USD 2 500 in 2022.
The trend could be reversed in 2023 and beyond as the list of qualifying vehicles
grows.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

Figure 2.8. Consumer and government spending on electric cars, 2017-2022

300

30%

200

20%

100

10%

0

0%

25

25

20

20

15

15

10

10

5

5

0
2017 2018 2019 2020 2021 2022

'17 '18 '19 '20 '21 '22 '17 '18 '19 '20 '21 '22 '17 '18 '19 '20 '21 '22
China

EuropeThousand USD (2022)

Public spending by region

40%

Billion USD (2022)

Billion USD (2022)

Global spending

400

0

United States

PHEV government spending
BEV government spending
Government support per unit (right axis)

Consumer spending
Government spending
Share of government spending in total (right axis)

IEA. CC BY 4.0.
Note: Government spending is the sum of direct central government spending through purchase incentives and foregone
revenue due to taxes waived specifically for new electric cars. Only central government purchase support policies forelectric cars are taken into account. Spending on charging is not included. Consumer spending is the total expenditure
based on model price, minus government incentives. Excludes incentives for company cars. Values and trends maychange slightly relative to previous publications following methodology improvements and better coverage of government
support schemes.
Source: IEA analysis based on EV Volumes and country policy documents.

Total global spending on electric cars stood at USD 425 billion in 2022, increasing by 50%
relative to 2021, with government support accounting for a stable 10% share of the total.

Finance, venture capital and trade
Financial performance of EV-related company stocks
Competition is getting tougher for electric cars

PAGE | 95

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While financial markets and investors have maintained confidence in the future oftransport being electric, 2022 was a difficult year for EV companies. The stocks of
EV-related companies had seen extraordinary growth in the past few years,
including through the Covid-19 pandemic, consistently outperforming traditional
carmakers since 2019. However, growth stalled in 2022 and financial markets
were rationalised in the context of increased market maturity and tougher
competition (especially in China with a downward price war for electric cars), andas a result of increased risks, geopolitical shocks, supply chain disruptions andhigher inflation rates. The gap between pure-play EV companies and incumbent
carmakers has narrowed accordingly.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

Figure 2.9. Performance of major car, battery and mining companies and market
capitalisation, 2019-2023
Market capitalisation
Trillion USD

Index (Jan-19 = 100)

Stock financial performance
400

300

2.0

1.5

200

1.0

100

0.5

0
Jan-19Jan-20EV

BatteryJan-21

Jan-22

Jan-23

Battery mineral and metal

0.0
Jan-20Jan-21

Top 10 automakers

Jan-22

Jan-23MSCI ACWIIEA. CC BY 4.0.

Notes: Data through Q1 2023 included. Performance is measured via arithmetic returns, which refer to the sum of quarterly
returns on a given stock (capital gains and dividends). The area highlighted in yellow represents a credit crisis, and in blue,
a recovery period for capital markets followed by the pandemic-induced credit shock in Q1 2020. The red highlight shows
the months following Russia’s invasion of Ukraine. Weekly financial performance of selected EV, battery and battery
mineral and metal companies are plotted against the top 10 carmakers and the broader public equity market benchmark,
MSCI All Country World Index (ACWI), at an index level. All indices except MSCI ACWI and for battery minerals and metals
are equal-weighted, giving equal importance to each constituent company regardless of market capitalisation or share. The
EV index consists of 14 pure-play EV companies (Tesla, Lucid, Rivian, NIO, Li Auto, XPeng, Fisker, Nikola, Arrival,
Proterra, Lion Electric, Hyzon, Canoo, Hyliion) and the battery index of 7 battery manufacturing companies (LG Energy
Solution, BYD, Contemporary Amperex Technology, Samsung SDI, Gotion High-tech, Eve Energy, Farasis Energy). The
battery mineral and metal index includes more than 40 companies selected in the S&P Global Core Battery Metals Index.
The top 10 carmakers include Toyota, Volkswagen, Kia Hyundai, General Motors, Ford, Nissan, Stellantis, Renault, andMercedes-Benz. Financial performance and market capitalisation do not necessarily reflect actual profits or losses, butrather investor expectations of future returns.
Source: IEA analysis based on data from Bloomberg.

Stocks of EV-related companies have outperformed those of incumbent car makers since2019, but supply chain disruptions, increasing competition and market rationalisation areclosing the gap.

PAGE | 96

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In 2022 the market capitalisation of EV companies shrank dramatically, falling froman all-time high at the end of 2021. This drop is almost entirely due to Tesla: thecompany’s market capitalisation decreased from its peak at the end of 2021 toearly 2023 by about USD 870 billion, which is more than the combined valuationof the selected top 10 incumbent carmakers early 2023. The company also heavily
reduced vehicle prices repeatedly in 2023 to boost sales, with discounts of up to
USD 34 000. However, Tesla remains the highest valued EV firm and the eighth
most highly valued company in the world, with strong investor confidence. It ranks
far ahead of competitors such as BYD, Li Auto and NIO, and other companies
such as Rivian, Lucid Motors and XPeng, which struggled in 2022, as well as
smaller players such as VinFast and truckmaker Lordstown Motors. As an
example of a company that had difficulties in 2022, Rivian halted plans to produce
electric vans with Mercedes-Benz in Europe, weakening confidence.

Global EV Outlook 2023
Catching up with climate ambitions

Figure 2.10.

Policy developments and corporate strategy

Share of global electric car markets by selected carmakers, 2016-2022

18%
15%
12%
9%
6%
3%
0%
2016

2017

BYD
General Motors
HyundaiRenault Nissan Mitsubishi

2018

2019
Tesla
Geely-Volvo
BMW

2020

2021

2022
Volkswagen
Stellantis
Mercedez-Benz
IEA. CC BY 4.0.

Notes: Market share in terms of electric car sales. Includes battery electric and plug-in hybrid electric cars.
Source: IEA analysis based on EV Volumes.

In 2022, BYD and Tesla accounted for over 30% of global EV markets. BYD overtook Teslain terms of sales, while competition remains fierce among incumbent automakers.

Increasing competition in EV markets is also influencing investor confidence andfinancial performance. Incumbent carmakers are diversifying their fleets in order
to comply with strengthened policies, such as CO2 standards, or to reach new
consumers, yet are struggling to catch up with EV companies. New market
entrants – especially from China – that aim to capture a share of booming EV
markets are also increasing pressure on incumbent carmakers. Carmakers that
do not have sufficiently attractive electric car offerings are likely to face issues in
the growing EV market in the near future.

PAGE | 97

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In 2022, the world’s largest carmakers in terms of ICE car sales (Volkswagen,General Motors, Toyota, Stellantis, Honda, Renault-Nissan-Mitsubishi, Ford,
Hyundai-Kia, Geely, Mercedes-Benz and BMW) accounted for 40% of global
electric car sales. In 2015, the same companies accounted for 55%. Over thesame period, the combined market share of just two companies, Tesla and BYD,
increased from 20% to over 30%. In 2015, Chinese carmakers accounted for 35%
of global EV sales, and this share increased to 45% in 2022, led by BYD (18%),
Geely (6%), and a number of other firms including SAIC, Chery, Changan,
Dongfeng, Hozon, CHJ, Great Wall, NIO, Xiaopeng and Leap. Geely, for example,
saw revenue increase by nearly 50% in 2022 relative to 2021, and net income byGlobal EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

10%, with expectations of a 15% growth in electric car sales in 2023. Incumbent
Chinese carmakers are also adapting their strategies, such as Great Wall Motor,
which in March 2023 announced a new strategy focusing on EVs, after sales
dropped in 2022 by nearly 20% relative to 2021.
Figure 2.11.

Gross margin of selected companies, 2015-2023

30%

20%

10%

0%
2015

2016

2017

Battery makers

2018

2019

Tesla

2020
BYD

2021

2022e

2023e

Top 10 automakers
IEA. CC BY 4.0.

Notes: Gross margin refers to gross profits as a share of revenues. Battery makers include LG Energy Solution, CATL,
Samsung SDI, Gotion Hi-Tech and Eve Energy, each having equal weight in the sample. Data for 2022 and 2023 arebased on company and financial analyst expectations.
Source: IEA analysis based on Bloomberg data.

EV battery company margins have been steadily decreasing since 2015. On average, Tesla
has been outperforming incumbent automakers.

Companies seek value upstream in batteries and criticalminerals
As battery demand continues to increase, battery makers are seeing strong financial
stock performance, outperforming that of EV makers in 2022, in spite of supply chain
disruptions and critical mineral price volatility. Their market capitalisation has also
been steadily increasing since 2020, suggesting strong investor confidence in future
returns and growth. In 2022, CATL, which accounts for nearly 40% of the world’s
market for EV cells, far ahead of LG Energy and BYD, saw net income nearly double
relative to 2021 as EV sales increased. Financial analysts suggest that the market
for lithium-ion batteries could boom from USD 90 billion in 2022 to USD 250 billion
in 2030.

PAGE | 98

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However, growth in market capitalisation was slower and financial performance notas high in 2022 as it was over 2020-2021. The gross profit margin of major battery
makers has been steadily decreasing from more than 30% in 2015 to about 20% in

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

2022. This is due not only to increasing competition in the market, but also to higher
raw material and commodity prices (e.g. for lithium, cobalt and nickel), which tend
to boost the profits of firms involved in extraction while putting pressure on the firms
purchasing the materials for refining and to manufacture products such as batteries.
As carmakers compete to secure battery supplies, they are increasing investments
for in-house battery production for increased vertical integration. For example, Tesla
is increasing its focus on battery manufacturing, and introducing innovative
concepts expected to cut costs. Toyota, GM, Hyundai and Ford are investing
USD 2.5 billion, USD 6.6 billion, USD 5.5 billion and USD 11.4 billion respectively in
EV and battery manufacturing sites in the United States alone. To secure supply ofcritical minerals needed for batteries, carmakers are also partnering with mining
companies or even directly investing in mining operations. Ford partnered with Valeand Huayou to build a processing plant in Indonesia with capacity to process 120 kt
of nickel per year; Stellantis invested EUR 50 million (USD 55 million) in theGerman lithium producer Vulcan, and Tesla signed agreements with mining
companies such as Albemarle, for lithium, and Prony Resources, for nickel.
Figure 2.12.

Key financial indicators of top mining companies, 2016-2022
Market capitalisation

Revenues
Index (2016 = 100)

500

130

600
500

400

Profit margin

120

400

300

110

300
200

200

100

100

100

0

90

0
2016 2018 2020 2022

Top 100 mining

Copper2016

2016 2018 2020 2022
Lithium

Nickel

Coal

2018

Gold

2020

2022

Iron ore
IEA. CC BY 4.0.

Notes: Top 100 mining refers to companies with the highest market capitalisation in 2022 and with a share of revenues
from mining of more than 70% of total revenues. The same rules apply to selected top coal companies. For copper, lithium
and nickel mining, each sample contains about 15-20 companies, and 30 for iron ore, with over 50% of revenues fromcorresponding mining activities. Revenues and market capitalisation are respectively cumulative over the sample ofcompanies, in current US dollars. Three-year moving non-weighted averages over the sample of companies are used forprofit margin, excluding single outlier data points.
Source: IEA analysis based on Bloomberg data.

Market capitalisation, revenues and profit margin of major critical mineral companies are
increasing rapidly, especially in lithium, often outperforming conventional mining
companies.

PAGE | 99

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The past two years have been very profitable for the mining industry. The
revenues of the top 40 mining companies increased by 30% between 2020 andGlobal EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

2021, and their net profit by 130%. In the context of the energy transition, criticalmineral demand is of particular interest for the mining sector. In 2021, thecombined value of critical minerals used for clean technologies was around
USD 75 billion. Assuming prices stay constant, by 2050, the needs of the energy
transition could increase this value fivefold in the Net Zero by 2050 Scenario. This
prospect makes the critical mineral sector especially attractive for investors.
Indeed, the market capitalisation of lithium, copper and nickel mining companies
grew by 350%, 90% and 85% respectively between 2016 and 2022, comparedwith 20% for coal producers and 75% for the top 100 mining companies over thesame period. This reflects increasing appetite for critical metal mining andconfidence in future returns. There are also new entrants in this sector, just as inother steps of the EV supply chain. In March 2023, Lithium Royalty Corp., a
Canadian company established in 2018, raised USD 109 million in the biggest
initial public offering (IPO) in the country since May 2022.
Competition is pushing some mining companies to also seek vertical integration:
downstream in mineral processing for miners, and upstream in mining for refiners.
Albemarle and Covalent Lithium, for example, are building processing sites inAustralia to turn the spodumene they extract into lithium hydroxide. In total, lithium
processing projects have received USD 5 billion in Western Australia alone overthe past three years. As a result of mining companies expanding operations
downstream, refiners are under pressure, with profit margins shrinking, especiallyin China where there is historic reliance on Australian spodumene. As a result,some refiners are moving upstream as a means to secure raw materials, but leadtimes to develop new mines can be long.
Looking to the future, vertical integration on both sides of EV supply chains – fromminers downstream and from carmakers upstream – could help decrease
manufacturing costs and prices for consumers accordingly, but could also lead togreater market concentration.

Venture capital investments in EV start-ups
In the past decade, venture capital (VC) funding for clean energy start-ups hasboomed, particularly in electromobility. Financial investors such as banks and VC
or private equity funds see in EV start-ups a potential for future returns with highexit values. Many companies, including major incumbent carmakers, also provide
funding to start-ups through corporate VC to develop new technology or to acquireconcepts developed by new entrants, as a means to maintain a competitive edge
and secure their own positioning in car markets. While in the past century mostmajor carmakers typically developed ICE technology in-house, through R&D andmanufacturing innovation, investing in start-ups is now a notable trend, illustratinga new way of innovating, and the need to catch up with quickly evolving markets
and regulatory environments.

PAGE | 100

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In 2022, VC investments in early-stage start-ups (i.e. seed and series A, referringto the first rounds of financing and the earlier stages of start-up development)
developing battery technologies increased by 15% relative to 2021 to nearlyGlobal EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

USD 850 million. VC investments in start-ups producing vehicles and charging
technologies increased by 50% to USD 1.2 billion. The increase was particularlyhigh in the charging segment, which saw an all-time high among early-stage
funding at USD 730 million. There was also a notable increase in funding forbattery recycling and reuse, which stood at USD 200 million, an eightfold increase
relative to 2021.

Million USD (2022)

Figure 2.13. Early-stage (left) and growth-stage (right) venture capital investments inbatteries (top) and electric mobility (bottom) start-ups, by technology,
2010-2022
Early stage

1 200

900

9 000

600

6 000

300

3 000

0
2010

2013

Million USD (2022)

Battery component

2016

2019

Battery maker

2022

0
2010

2013

Battery management system

Early stage

1 200

2016

2019

2022

Battery recycling and reuse

Growth stage
12 000

900

9 000

600

6 000

300

3 000

0
2010
Car

Growth stage

12 0002013

Charging

2016

2019

2022

Truck, bus and commercial vehicle

0
2010
2/3-wheeler

2013

2016

2019

Electric mobility fleet

2022
Other

IEA. CC BY 4.0.
Notes: Early-stage deals refer to seed and series A, growth-stage to series B and growth equity deals. “Other” includes
electric vehicle components and manufacturing (excluding electric motors that are not specific to road transport), digital andsoftware products otherwise excluded, hybrid car makers, EV project development and operation, and EV finance.
Source: IEA analysis based on Cleantech Group i3 database.

PAGE | 101

IEA. CC BY 4.0.

Early-stage VC investments in battery and EV charging start-ups have boomed in the last
three years, as electric car maker companies mature and attract growth-stage funding.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

Meanwhile, early-stage electric car manufacturers are raising less and less money
as EV markets mature. Start-ups developing new electric cars were the first
beneficiaries of booming EV VC in around 2015, but less and less capital isprovided to new entrants as competition increases and major incumbents
accelerate electrification. The 2015-2020 period also saw major VC activity in
China, but this has now declined as the market consolidates around frontrunners– many of which were start-ups less than a decade ago.
Early-stage investors are instead looking for new investment opportunities in thevalue chain, either upstream (such as batteries or critical minerals) or downstream(such as charging or recycling). Companies developing lithium-ion batteries still
dominate, accounting for 60% of early-stage VC investments in the battery
segment over 2018-2022, but new chemistries are on the rise, both lithium- andnon-lithium-based. Critical minerals VC is also booming as metal demand surges,
standing at around USD 650 million in 2022 from close to zero in 2018-2019,
before the Covid-19 pandemic.
Figure 2.14. Venture capital investments in start-ups developing battery technologies,
by chemistry, 2015-2022
Early-stage battery venture capital

Critical minerals venture capitalMillion USD (2022)

100%
75%
50%

Lithium ion
Flow
Sodium ion

600
400
200

25%
0%

800

0

2018-2022
Metal-hydrogen
Solid state
Other

Other lithium
Zinc
Undisclosed

2018

2019

Lithium extraction
Cobalt extraction

2020

2021

2022

Lithium refining

IEA. CC BY 4.0.
Notes: “Other lithium” includes lithium metal-based and lithium-sulphur batteries. “Flow” includes redox flow (including
vanadium-based) as well as other flow batteries (e.g. iron-based, hydrogen-bromine). “Other” includes lead acid, metal-air,organic materials and polymer batteries. Critical minerals venture capital is not exclusive to electric mobility applications.
Source: IEA analysis based on Cleantech Group i3 database.

Lithium-ion makes up 60% of early-stage battery venture capital, but many alternative
chemistries are in development. Critical minerals venture capital is booming as metal
demand surges.

PAGE | 102

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One notable development in 2022 was the drop in growth-stage investments(i.e. series B and growth equity, which refers to the later rounds of financing as
start-ups increase activity). These fell by 25% relative to 2021 both for batteries,
to USD 6.1 billion, and for vehicles and charging, to USD 7.4 billion, due to lower
investments in battery and truck manufacturers. Putting things into perspective,Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

2021 was an exceptional year for batteries, as investments caught up following
the Covid-19 pandemic; and 2022 was still twice as high as ever before. As such,the downward trend in 2022 might not be of immediate concern. For trucks, the2019-2021 period was a fruitful one in growth equity VC markets, but investor
appetite may be drying up following concerns over the performance of leading
companies.
Over the 2018-2022 period, China accounted for 70% of VC investments in electric
car start-ups, while the United States led in investments in charging, trucks andbattery components. Funding for battery making start-ups was evenly distributed
across China, Europe and the United States. India had a strong lead in twowheelers, the only EMDE beyond China with a significant presence in global EV
VC.

Electric road transport

Figure 2.15. Share of total cumulative venture capital investment in electric mobility
technology areas by country or region, 2018-2022
Car maker
Charging
Truck, bus and commercial
Two/three-wheeler
Electric mobility fleet

Batteries

Battery component
Battery makerBattery management system
Battery recycling and reuse
0%
China

25%
EuropeIndia

50%
United States

75%

100%

Rest of world
IEA. CC BY 4.0.

Notes: Includes both early- and growth-stage deals. The country or region is determined based on company headquarters
and not the origin of investors. “Europe” includes European Union countries, Norway, Switzerland and the United Kingdom.
Source: IEA analysis based on Cleantech Group i3 database.

Global venture capital markets are often regionally concentrated, such as in China forelectric cars, in the United States for heavy-duty vehicles and batteries, and in India for
two/three-wheelers.

Trade in EV-related goods

PAGE | 103

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Given that China is the largest electric car market, it comes as no surprise that it
is also the largest producer of EVs: China imports under 1% of the electric cars
sold in the country. The focus of China’s EV policy on domestic sales has also
attracted international car manufacturers to set up production in China. Around
25% of all the electric cars manufactured in China in 2022 were made by foreignGlobal EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

carmakers, and since EV production costs in China are relatively low, thosecarmakers, as well as domestic ones, also export part of their Chinese output.
China is therefore a leading exporter of electric cars, representing over 35% ofelectric car exports, as well as of batteries. In 2022, the share of global battery
manufacturing capacity located in China was around 75%.

EV sales (million)

Figure 2.16. Global electric car sales and share of selected regions in global trade,
2018-2022
12

40%

Sales from:
Domestic production

930%

Imported
Share of global exports:
China

6

20%

Europe
Japan

3

10%

Korea
United States

0

2018

2019

2020

2021

2022

0%

Rest of the world

IEA. CC BY 4.0.
Note: The share of global exports represents the volume of exported electric cars from a region divided by the global
exported volume. EV sales between countries within the same regional group (i.e. Europe and rest of the world) areconsidered domestic production.
Source: IEA analysis based on EV Volumes.

Around 15% of electric vehicles are traded internationally, with China being the largest
exporter.

PAGE | 104

IEA. CC BY 4.0.

Europe is China’s largest trade partner for both electric cars and their batteries.
Indeed, over the past year the share of electric cars sold in the European market
coming from China increased from about 11% in 2021 to about 16% in 2022.
However, almost 20% of the electric cars shipped from China for sale in Europe
were manufactured by European OEMs with plants in China; another 40% were
American cars produced in China.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

Thousand vehicles

Figure 2.17. Electric car imports to Europe by country of production and manufacturer
headquarters, 2021-2022
500

Carmaker
headquarters
based in:

400

Korea

300

Japan

200

China

100

United States0

Europe
2021
2022
China

2021
2022
Korea

2021
2022
United States

2021
2022
Japan

2021
2022
Other

Location of EV production for export to Europe
IEA. CC BY 4.0.
Source: IEA analysis based on EV Volumes.

European imports of electric cars manufactured in China have increased by almost 175 000
over the past year, though only 40% of these come from Chinese OEMs.

Over the past five years, the share of global electric car exports coming from China
has increased more than eightfold, with China becoming the largest exporter in
2021 and the gap further widening in 2022. The share of electric car exports fromthe United States peaked in 2019 and has since fallen below the levels exported
from China, Korea and Europe. While the number of electric cars traded globallyhas continued to increase over time, the share of exports out of total electric car
sales has decreased over the past four years.

PAGE | 105

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The transition to electric mobility is shifting and will continue to shift tradebalances. Historically, Europe has been a net exporter of ICE cars (by value),
while China has been a net importer. However, with the transition to electric cars,
the size of the ICE car market is expected to shrink over time, while the EV market
grows. China, Japan and Korea are all net exporters of electric cars, electricmotors and Li-ion batteries, and are well positioned to benefit from a growing
electric car market. Nonetheless, these battery-exporting countries are alsostrongly dependent on the import of critical minerals, such as lithium, cobalt andnickel.

Global EV Outlook 2023
Catching up with climate ambitions

Policy developments and corporate strategy

Figure 2.18. Trade balance along car supply chains in selected countries/regions, 2021
20%
ICE car
10%
Electric car
0%

ICE motor

Electric motor

-10%

-20%

Li-ion battery
EuropeNorth America

China

Japan and Korea
IEA. CC BY 4.0.

Notes: ICE = internal combustion engine. Trade balance here is the net export divided by global trade in monetary value ofa given commodity, a negative value meaning that the region is a net importer. Trade inside a region is excluded. The
Harmonized System codes used for each value are as follows - ICE car: 870321, 870322, 870323, 870324, 870331,
870332 and 870333; EV car: 870380; ICE motor: 840734; Electric motor: 850153; Li-ion battery: 850650. Note that thosemotors and batteries may not be exclusively used as car components.
Source: IEA analysis based on BACI international trade database.

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The transition to electric vehicles is changing the trade balance along the supply chain for
cars.

Global EV Outlook 2023
Catching up with climate ambitions

Prospects for EV deployment

Prospects for electric vehicle
deployment
Several pathways to electrify road transport in the period to 2030 are explored inthis section. First, deployment of electric vehicles (EVs) is projected by region androad segment for the Stated Policies and Announced Pledges scenarios, andglobally by segment for the Net Zero Emissions by 2050 Scenario. These
projections are then compared to announcements by original equipment
manufacturers (OEMs). Then the corresponding battery demand is projected,
followed by roll-out requirements for charging infrastructure. Finally, the impactsof EV deployment are assessed, including increased electricity demand, oildisplacement, implications for tax revenues, and net well-to-wheels GHG
emissions.

Outlook for electric mobility
Scenarios
A scenario-based approach is used to explore road transport electrification and its
impact, based on the latest market data, policy drivers and technology
perspectives. Two IEA scenarios – the Stated Policies and Announced Pledges
scenarios – inform the outlooks, which are examined in relation to the Net Zero
Emissions by 2050 Scenario at the global level. 1 These scenarios are based on
announced policies, ambitions and market trends through the first quarter of 2023.
The purpose of the scenarios is to assess plausible futures for global EV markets
and the implications they could have. The scenarios do not make predictions about
the future. Rather, they aim to provide insights to inform decision-making bygovernments, companies and stakeholders about the future of EVs.
These scenario projections incorporate GDP and population assumptions from theInternational Monetary Fund (2022) and United Nations (2022), respectively.

Stated Policies Scenario
The Stated Policies Scenario (STEPS) reflects existing policies and measures, aswell as firm policy ambitions and objectives that have been legislated by

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1
The projections in the Stated Policies and Announced Pledges scenarios are based on historical trends through the end of2022 as well as stated policies and ambitions as of the end of March 2023. The Net Zero Emissions by 2050 Scenario is
consistent with the World Energy Outlook 2022 publication.

Global EV Outlook 2023
Catching up with climate ambitions

Prospects for EV deployment

governments around the world. It includes current EV-related policies, regulations
and investments, as well as market trends based on the expected impacts oftechnology developments, announced deployments and plans from industry
stakeholders. The STEPS aims to hold up a mirror to the plans of policy makers
and illustrate their consequences.

Announced Pledges Scenario
The Announced Pledges Scenario (APS) assumes that all announced ambitions
and targets made by governments around the world are met in full and on time.
With regards to electromobility, it includes all recent major announcements ofelectrification targets and longer-term net zero emissions and other pledges,
regardless of whether these have been anchored in legislation or in updated
Nationally Determined Contributions (NDCs). For example, the APS assumes thatcountries that have signed on to the Conference of the Parties (COP 26)
declaration on accelerating the transition to 100% zero emissions cars and vans
will achieve this goal, even if there are not yet policies or regulations in place tosupport it. In countries that have not yet made a net zero emissions pledge or set
electrification targets, the APS considers the same policy framework as the
STEPS. Non-policy assumptions for the APS, including population and economic
growth, are the same as in the STEPS.
The difference between the APS and the STEPS represents the “implementation
gap” that exists between the policy frameworks and measures required to achievecountry ambitions and targets, and the policies and measures that have beenlegislated.

Net Zero Emissions by 2050 Scenario
The Net Zero Emissions by 2050 Scenario (NZE Scenario) is a normative scenariothat sets out a narrow but achievable pathway for the global energy sector toachieve net zero CO2 emissions by 2050. The scenario is compatible with limiting
the global temperature rise to 1.5°C with no or limited temperature overshoot, inline with reductions assessed by the Intergovernmental Panel on Climate Change
in its Special Report on Global Warming of 1.5°C. There are many possible paths
to achieve net zero CO2 emissions globally by 2050 and many uncertainties that
could affect them. The NZE Scenario is therefore a path and not the path to net
zero emissions.

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The difference between the NZE Scenario and the APS highlights the “ambition
gap” that needs to be closed to achieve the goals under the 2015 Paris
Agreement.

Global EV Outlook 2023
Catching up with climate ambitions

Prospects for EV deployment

Electric vehicle fleet to grow by a factor of eight or moreby 2030
The total fleet of EVs (excluding two/three-wheelers) grows from almost 30 million
in 2022 to about 240 million in 2030 in the Stated Policies Scenario (STEPS),
achieving an average annual growth rate of about 30%. In this scenario, EVs
account for over 10% of the road vehicle fleet by 2030. Total EV sales reach over
20 million in 2025 and over 40 million in 2030, representing over 20% and 30% of
all vehicle sales, respectively.
Figure 3.1.

Electric vehicle stock by mode and scenario, 2022-2030

2026

Million vehicles

PLDVs - BEV
Buses - BEV

NZE

APS

STEPS
450
400
350
300
250
200
150
100
50
0
2022

2030

2022

2026

PLDVs - PHEV
Buses - PHEV

2030

2022

LCVs - BEV
Trucks - BEV

2026

2030

LCVs - PHEV
Trucks - PHEV
IEA. CC BY 4.0.

Notes: STEPS = Stated Policies Scenario; APS = Announced Pledges Scenario; NZE = Net Zero Emissions by 2050
Scenario; BEV = battery electric vehicle; PHEV = plug-in hybrid electric; PLDV = passenger light-duty vehicle; LCV = lightcommercial vehicle.

EV deployment commensurate with government pledges is only 5% above what statedpolicies would imply by 2030.

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In the Announced Pledged Scenario (APS), based on announced government
targets and pledges that go beyond existing policies, the global EV fleet reaches
almost 250 million in 2030, around 5% higher than in the STEPS. The averageannual growth rate in the APS is nearly 35%, with the result that one in sevenvehicles on the road is an EV in 2030. Total EV sales reach 45 million in 2030,
representing over 35% of all vehicle sales.

Global EV Outlook 2023
Catching up with climate ambitions

Figure 3.2.

Prospects for EV deployment

Electric vehicle sales by region, 2022-2030

Million vehicles

75
60
45
30
15
0

2022

China

2025
2030
Stated Policies Scenario
Europe

2025
2030
2025
2030
Announced Pledges Scenario Net Zero Emissions by 2050
Scenario

United States

Japan

India

Other

GlobalIEA. CC BY 4.0.

Global EV sales increase around fourfold from 2022 to 2030 under both stated policies andannounced ambitions.

The global EV sales share in 2030 in the STEPS is about half that in the NZE
Scenario, in which the fleet of EVs grows more rapidly, at an average annual rateof around 40%, reaching 380 million EVs on the road in 2030. Electric vehicle
sales reach over 30 million in 2025 and over 70 million in 2030, a total of
approximately 30% and 60% of all vehicle sales, respectively.
Figure 3.3.

Electric vehicle sales shares by mode and scenario, 2030

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2/3W

LDV
2022

Bus
STEPS

APS

Truck

NZE
IEA. CC BY 4.0.

Notes: 2/3W = two/three-wheeler; LDV = light-duty vehicle; STEPS = Stated Policies Scenario; APS = Announced Pledges
Scenario; NZE = Net Zero Emissions by 2050 Scenario.

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IEA. CC BY 4.0.

Existing policies are projected to yield market shares almost in line with country pledges
across all modes of transport.

Global EV Outlook 2023
Catching up with climate ambitions

Box 3.1

Prospects for EV deployment

Closing the implementation gap: how EV policy is catching up
with targets

Targets and ambitions for clean energy technology deployment are generally moreeasily formulated than they are achieved, but in the case of EVs, the momentum
is clearly on the side of achievement. Strong market uptake in 2022, combinedwith major policy announcements over the past year, have led to a significant
upward revision of EV deployment to 2030 in the STEPS presented in this editionof the Global EV Outlook compared to the 2022 edition. The projected sales sharesof EVs based on stated policies and market trends are now coming close to country
stated ambitions for EVs, meaning that the policy implementation gap – thedifference between country deployment ambitions and the policies currently inplace – in the 2023 Outlook is much smaller than in the 2022 edition.
This is most notable for light-duty vehicles, where recent policies such as the US
Inflation Reduction Act (IRA) and new EU CO2 standards for cars and vans haveresulted in a significantly higher EV sales share in 2030 in the STEPS. In this year’s
Outlook, under announced ambitions, the electric car sales share exceeds 40% in
2030 compared to 35% under stated policies: this gap has more than halved in thepast year. For trucks and buses, the EV sales share in 2030 in the STEPS also
increased faster than ambition. As a result, the gap between ambition andlegislated policies for HDVs is half of what it was in the 2022 Outlook.
Electric car sales share implementation gap, 2030
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%

2030 STEPS

Implementation
gap
2022 Outlook

2030 APS

2030 STEPS

Implementation
gap
2023 Outlook

2030 APS

IEA. CC BY 4.0.

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IEA. CC BY 4.0.

Realising the potential of EVs to support government climate (as well as energy
security) ambitions is thus almost in reach under current policy frameworks. In
particular, the gap between policy and ambition has closed in three of the largest
EV markets: the European Union, the United States and China. At the global level,oil displacement by EVs reaches 1.8 million barrels per day in 2025 (over 5 mb/din 2030) under stated policies. As a result, global demand for oil-based roadtransport fuels will peak by 2025.

Global EV Outlook 2023
Catching up with climate ambitions

Prospects for EV deployment

The momentum seen over the past year in terms of increasing EV sales and new
supportive policies being introduced, along with funding designated for thenecessary infrastructure (for example, the USD 5 billion allocated in the US IIJA to
support EV charger installation), have also led industry players to invest more in
EV supply chains. Notably, planned EV battery manufacturing expansions are set
to increase capacity more than fourfold, reaching 6.8 TWh/year of production
capacity in 2030, 65% higher than is needed to enable the level of EV deployment
in the APS. Taken together, this suggests that even higher EV deployment than is
implied by the APS is achievable by 2030 if policy efforts are sustained and criticalpotential bottlenecks (such as around recharging infrastructure and mining) areaddressed early on.

Light-duty vehicles
Light-duty vehicles (LDVs), including passenger light-duty vehicles (PLDVs) andlight commercial vehicles (LCVs), continue to make up the majority of electricvehicles (excluding two/three-wheelers). This is a result of strong policy support,
including light-duty vehicle fuel economy or CO2 standards, the availability of EV
models, and the size of the LDV market. In the STEPS, electric LDV sales areprojected to reach over 20 million in 2025, doubling the number of sales in 2022,
and to quadruple to 40 million in 2030. The sales share of electric LDVs thusincreases from 13% in 2022 to over 20% in 2025 and around 35% in 2030. The
stock of electric LDVs reaches about 230 million in 2030, meaning that about one
in every seven LDVs on the road is electric.
In the APS, the fleet of electric LDVs reaches over 240 million in 2030, a 15%
stock share. Of these, 230 million are electric PLDVs, with only 6% being LCVs.
Sales of electric LDVs reach almost 45 million in 2030 in the APS, representing asales share of 40%. These results reflect government electrification ambitions andnet zero pledges, including the 2021 COP 26 declaration target to achieve 100%zero-emission LDV sales by 2040, and by 2035 in leading markets, which 40
national governments have committed to.
In the NZE Scenario, the sales share of electric LDVs reaches 30% in 2025, four
years earlier than in the STEPS. In 2030, the sales share is over 60%, about 80%
higher than in the STEPS and 55% higher than in the APS.

Buses

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Governments have made significant progress in electrifying public bus fleets. In
2022, there were more than 800 000 electric buses on the road, representing over
3% of all buses. As such, buses are the most electrified road segment, excluding
two/three-wheelers. In the STEPS, the electric bus fleet reaches 1.4 million in
2025 and 2.7 million in 2030, at which point around one in ten buses will beelectric. In the near term, electrification is expected to progress most rapidly within
the publicly owned urban bus fleet, which is covered by government procurement

Global EV Outlook 2023
Catching up with climate ambitions

Prospects for EV deployment

regulations and, in some cases, government funding. For example, Canada isaiming to put 5 000 electric public and school buses on the road by the end of2025 via the CAD 2.75 billion Zero Emission Transit Fund.
In the APS, the electric bus fleet exceeds 3 million in 2030, reaching a stock shareof over 10%. In 2030, about a quarter of buses sold are electric, which is about
35% higher than the sales share in the STEPS. In part, this increase is due to the
proposed EU heavy-duty vehicle CO2 standards, which would require 100% zeroemission city bus sales from 2030. In the NZE Scenario, the electrification of buses
is even more rapid, with one in two buses sold in 2030 being electric.

Medium- and heavy-duty trucks
Medium- and heavy-duty trucks are more difficult to electrify than other roadsegments, due in part to the size, weight and cost of the batteries needed to fully
electrify this segment. However, progress is being made: around 320 000 electrictrucks were on the road in 2022. By 2030, the fleet of electric trucks reaches
almost 3.5 million in the STEPS, over 3% of the total truck fleet.
In the APS, the stock of electric trucks exceeds 4 million in 2030, a stock share of
4%. Electric truck sales increase from a negligible share today to over 9% in the
STEPS in 2030 and 13% in the APS. The increased sales in the APS are driven
in particular by the Global Memorandum of Understanding (MoU) on ZeroEmission Medium- and Heavy-Duty Vehicles, through which 27 countries have
now pledged to reach 30% zero-emission medium- and heavy-duty vehicle 2 sales
by 2030 and 100% by 2040. In addition, the European Union has proposed HDV
CO2 standards that would require a 45% reduction in emissions in 2030 compared
to 2019 levels.
In the NZE Scenario, electric trucks reach 30% of sales in 2030, which is alignedwith the Global MoU on Zero-Emission Medium- and Heavy-Duty vehicles.
However, this sales share is still two-and-a-half times that in the APS, and overthree times that in the STEPS.

Two/three-wheelers
Two/three-wheelers are currently the most electrified road transport segment.
Given the vehicles’ light weight and limited daily driving distance, battery
electrification is relatively easy and makes economic sense on a total cost ofownership basis in many regions. In 2022, the electric two/three-wheeler fleet
totalled over 50 million, reaching a stock share of around 7%.
In the STEPS, the fleet of electric two/three-wheelers reaches 220 million in 2030,
or a quarter of the total two/three-wheeler fleet. In the APS, the stock grows to
280 million, and almost 30% of all two/three-wheelers are electric. The electricsales share in 2030 reaches 50% in the STEPS and 60% in the APS. In the NZE
Scenario, the electric two/three-wheeler sales share reaches almost 80% in 2030.

Includes buses.

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2

Global EV Outlook 2023
Catching up with climate ambitions

Prospects for EV deployment

The implementation gap between stated policies andcountry ambitions is shrinking in most major electricvehicle markets
Figure 3.4.

Electric vehicle sales shares by mode and region in the Stated Policies
and Announced Pledges scenarios, 2030
Europe

China

India

Sales share (%)

100%
80%
60%
40%

Japan

2/3 Ws
LDVs
Buses
Trucks2/3 Ws
LDVs
Buses
Trucks2/3 Ws
LDVs
Buses
Trucks2/3 Ws
LDVs
Buses
Trucks2/3 Ws
LDVs
Buses
Trucks0%

2/3 Ws
LDVs
Buses
Trucks20%

Rest of the world

United States

Sales share (%)

100%
80%
60%
40%

STEPS:

BEV

PHEV

APS:

BEV

2/3 Ws
LDVs
Buses
Trucks2/3 Ws

2/3 LDVs
Ws
LDVs
Buses
Buses
TrucksTrucksBuses
Trucks2/3 WsLDVs
2/3Buses
Ws
LDVs
TrucksWs
2/32/3Ws
LDVs
LDVs
Buses
Buses
TrucksTrucks2/3 Ws

2/3 LDVs
Ws
Buses
LDVs
TrucksBuses
Trucks0%

2/3 Ws
LDVs
Buses
Trucks20%

PHEV
IEA. CC BY 4.0.

Notes: STEPS = Stated Policies Scenario; APS = Announced Pledges Scenario; 2/3Ws = two/three-wheelers; LDVs =light-duty vehicles; BEV = battery electric vehicle; PHEV = plug-in hybrid electric vehicle. The countries included in Europe
are listed in documentation related to IEA’s Global Energy and Climate Model. Regional projected EV sales and sales
shares data can be explored in the interactive Global EV Data Explorer.

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With two/three-wheelers continuing to reign in EV markets around the world, announced
pledges are pushing EV market shares for LDVs and buses above the 40% mark by 2030 inalmost all major markets.

Global EV Outlook 2023
Catching up with climate ambitions

Prospects for EV deployment

China
China once again exceeded expectations for electric car sales in 2022, reachinga sales share of around 29%. As such, the government’s target of 20% new energy
vehicle sales in 2025 was comfortably met three years ahead of time. China has
gradually reduced its purchase subsidies for EVs since 2017, but electric car sales
have continued to increase strongly. It is expected that sales will continue to growdue, in part, to the increasing availability of affordable EV models, despite 2023
being the first year without any subsidy.
The sales share of electric cars and vans reaches almost 45% by 2025 in the
STEPS, and over 60% in 2030. Given that the government’s electrification targets
have already been met, and that 60% electric light-duty vehicle sales in 2030 ison track with China’s carbon neutrality by 2060 pledge, the electric LDV sales
shares to 2030 in the APS are the same as in the STEPS. In fact, 60% electric
LDV sales in 2030 is in line with the global share in the Net Zero Emissions by
2050 Scenario.
China is the global leader in terms of electric share of the two/three-wheeler fleet,with more than one-third of all two/three-wheelers being electric. In both the
STEPS and APS, China is expected to remain the leader in electric two/threewheeler sales. In the STEPS, the sales share of electric two/three-wheelers
reaches almost 80% in 2030. The APS follows the same trends to 2030.
China also has one of the highest stock shares of electric buses, reaching nearly
15% in 2022 and totalling over 750 000 (>95% of the global stock). In 2030, thesales share of electric buses increases to 50% in both scenarios, up from 18% in
2022. While electric sales of medium- and heavy-duty trucks are significantly lower
than other road modes, China also led in electric truck stock in 2022, with over
95% of the world’s electric trucks. Electric truck sales are projected to reach asales share of nearly one-quarter in 2030 in both scenarios. Given that othercountries have announced truck electrification targets, China’s lack of announced
ambitions means that other countries achieve higher sales shares in the APS.

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The sales share of EVs across all road transport modes (excluding two/threewheelers) reaches around 60% in 2030 in both scenarios. Across all modes, thecurrent market dynamics, and the policy landscape as considered in the STEPS
to 2030, is sufficient to bring EV sales shares high enough to be in line with China’s
ambition of climate neutrality by 2060, as well as with provincial electrification
targets. As such, in China there is no gap between what current policy frameworks
have legislated for and what the targets are.

Global EV Outlook 2023
Catching up with climate ambitions

Prospects for EV deployment

EuropeEurope maintains its status as one of the most advanced EV markets in the
STEPS through 2030 in light of recent market trends and a supportive policy
landscape. The 2023 adoption of stricter CO2 standards for cars and vans in theEuropean Union has significantly increased electric LDV sales shares in the
STEPS. To meet the 2030 target of 55% emissions reduction for cars and 50%
reduction for vans (compared to 2021 levels), the electric LDV sales share in theEuropean Union increases from around 20% in 2022 to almost 65% in 2030. For
Europe as a whole, electric LDV sales increase from 19% in 2022 to almost 60%
in 2030. Given that the European Union has now legislated to the level of ambition
laid out in the Fit for 55 package, there is no implementation gap for the European
Union with respect to LDVs. The electric LDV sales share in 2030 for Europe,
however, is slightly higher in the APS than the STEPS, reaching almost 65% in
the APS. This is primarily driven by additional EV sales based on the
United Kingdom’s proposed ZEV mandate trajectory, which has the overall
ambition to reach 100% zero-emission sales in 2035, as well as the eight non-EU
countries in Europe 3 that have joined the Accelerating to Zero Coalition.
For buses and trucks, the EU Clean Vehicles Directive sets minimum
requirements for the procurement of “clean” public buses and trucks that vary bymember state, with average minimum sales of 33-65% clean buses and 7-15%
clean trucks from 2026 to 2030. A number of European countries also offer
financial incentives for electric buses and trucks in the form of tax exemptions,purchase subsidies and funding to support heavy-duty charging infrastructure. In
the STEPS, the sales shares of electric buses and trucks reach 40% and 10%
respectively in 2030. Within the European Union the sales shares reach 55% andaround 13% in 2030. The APS takes into account the European Union’s proposed
heavy-duty vehicle (HDV) CO2 standards, which would require 100% of city bus
sales to be zero-emission from 2030, and other heavy-duty vehicles to reduce CO2
emission by 45% from 2030 compared to 2019 levels. In addition, the APS
includes the ambitions of 18 European national governments 4 who have signed
the Global Memorandum of Understanding (MoU) on Zero-Emission Medium- andHeavy-Duty Vehicles to reach 30% zero-emission HDV sales shares in 2030 and
100% in 2040.
In Europe, the EV sales share across all modes (excluding two/three-wheelers) is
55% in 2030 in the STEPS. In the APS, Europe has a combined EV sales shareof over 60% in 2030 (for electric LDVs, buses and trucks), which is in line with theglobal trajectory in the NZE Scenario. Last year, the implementation gap in Europe
in terms of EV sales share in 2030 was about 15 percentage points. This has now

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3Here, we refer to the Europe regional definition in the IEA’s Global Energy and Climate (GEC) Model, which includes Türkiye
and Israel.
4
As Wales, Scotland and the United Kingdom are listed separately as signatories, each is counted in the European total.

Global EV Outlook 2023
Catching up with climate ambitions

Prospects for EV deployment

shrunk to six percentage points, with greater increases in EV sales shares in the
STEPS, due to new regulations and market trends, than in the APS due to theadditional signatories to zero-emission vehicle (ZEV) initiatives and the proposed
EU HDV CO2 standards. For the European Union, the implementation gap in 2030
across all modes (excluding two/three-wheelers) has closed from over 10
percentage points in the 2022 Outlook to 1 percentage point.

United States
With a supportive policy landscape, sales of electric cars and vans are expectedto accelerate over the remainder of this decade in the United States, reaching thegovernment target of 50% in 2030. With the foundation of stricter US fuel economy
standards for 2024-26 legislated in 2021, 5 a slate of new measures are expected
to promote uptake of electric LDVs, namely: financial incentives for electric cars
included in the Inflation Reduction Act (IRA), allocated funding for EV charging
infrastructure in the Infrastructure Investment and Jobs Act (IIJA), and growing
adoption of California’s Advanced Clean Cars II (ACC II) regulations by a numberof states. The implementation gap between the STEPS and APS LDV sales in
2030 has fully closed due to the passing of the IRA and adoption of the ACC II
regulations in 2022.
The IRA also includes a tax credit for the purchase of zero-emission medium- andheavy-duty trucks, as well as for the installation of EV chargers. In the STEPS, thesales share of electric trucks reaches 10% in 2030. In 2022, the United States
signed the Global Memorandum of Understanding (MoU) on Zero-Emission
Medium- and Heavy-Duty Vehicles, with a 2030 target of 30% zero-emission
vehicles sales across buses and trucks. As such, the electric truck sales sharereaches slightly less than 30% (which is balanced by higher bus sales shares toachieve the overarching target) in 2030 in the APS. The electric bus sales sharereaches more than 40% in 2030 in the APS, compared to about 30% in the
STEPS.
In the United States the EV sales share across all modes (excluding two/threewheelers) reaches almost 50% in both the STEPS and APS. Thus, theimplementation gap for EV sales shares in the United States shrank from arounda 30 percentage points difference in 2030 last year to a negligible difference inthis year’s Outlook.

The U.S. Environmental Protection Agency proposed new GHG emissions standards for light- and medium-duty vehicles
in April 2023, which are expected to further promote EV sales. As this was announced after the first quarter of 2023, theproposal is not reflected in the scenario projections.

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Global EV Outlook 2023
Catching up with climate ambitions

Prospects for EV deployment

Japan
In Japan, the sales share of electric cars and vans increases from 3% in 2022 to
20% in 2030 in the STEPS, in part to comply with the 2030 fuel economy standards
for passenger cars. In the APS, electrification of LDVs increases more rapidly toreach 30% in 2030, which is in line with the government’s target of 20-30% EV
sales for passenger light-duty vehicles and 20-30% electrified vehicle sales forlight commercial vehicles.
Japan also has fuel efficiency standards for heavy-duty vehicles, which state that
efficiency must improve by around 13% for trucks and 14% for buses by the fiscal
year 2025 compared to 2015. In 2030, in the STEPS, the electric bus sales sharereaches almost 30% and the electric truck sales share reaches over 10%. Japan’sGreen Growth Strategy also sets targets for commercial vehicles, including that
100% of new commercial vehicle sales should be electrified or suitable for the useof decarbonised fuels by 2040. In the APS, sales of electric trucks amount toalmost 15% in 2030, while the electric bus sales share reaches about 55%.
In Japan, the EV sales share across all modes (excluding two/three-wheelers) is
20% in 2030 in the STEPS and about 30% in the APS. The “implementation gap”
has remained the same over the past year, as no new policies or ambitions for
EVs were announced.

India
India is one of the largest two-wheeler markets in the world, and both the national
and local governments are promoting electric two-wheelers. For example,
modifications to the FAME-II scheme in 2021 increased purchase incentives forelectric two-wheelers to cover up to 40% of the price. The sales share of electric
two/three-wheelers in India increases from around 7% in 2022 to almost 50% in
2030 in the STEPS. In addition, various Indian states have sales or stock targets
for electric two- and/or three-wheelers, including Assam, Gujarat, Karntaka andMaharashtra. In the APS, the sales share of electric two/three-wheelers reaches
over 60% in 2030.
The rate of electrification of buses and LDVs is lower, reaching about 20% and
15% respectively in 2030 in the STEPS. In the APS, electric buses reach a sales
share of more than 25% and electric cars and vans a share of more than 30% in
2030. The APS reflects India signing the COP 26 declaration to transition to 100%zero-emission LDV sales by 2040. While there is no national target for electricbuses, four Indian states (containing around 15% of India’s population) aim toreach 100% electric bus sales by 2030 or earlier.

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The EV sales share across all modes (including two/three-wheelers) in India is
about 40% in 2030 in the STEPS (and closer to 14% if two/three-wheelers areGlobal EV Outlook 2023
Catching up with climate ambitions

Prospects for EV deployment

excluded). In the APS, EV sales shares in India scale up to over 50% in 2030
across all road vehicle modes (30% excluding two/three-wheelers). The“implementation gap” in India, in terms of EV sales shares, is therefore about
15 percentage points.

Other regions
The number of countries around the world that have not yet developed a clear
vision for electromobility or set targets is declining over time. In emerging anddeveloping economies in particular, adoption of EVs can be hindered by a lack of
fiscal incentives, limited availability of charging infrastructure and purchase pricehurdles, but the Global Electric Mobility Programme is working with governments
in low- and middle-income countries to advance deployment of EVs.
In the STEPS, the average EV sales share across regions and countries otherthan those listed above is about 8% for LDVs, 6% for buses and 1% for trucks in
2030. In the APS, sales across these other regions reach over 15% of LDVs, 10%of buses and 2% of trucks. The countries that have adopted EV-related policies
and set ambitions tend to have higher EV sales shares than these averages. For
example, Canada and Korea both have fuel economy standards for light-duty
vehicles and purchase incentives for electric LDVs, and as such the electric LDV
sales shares reach over 30% in both Canada and Korea in 2030 in the STEPS,
which increase to around 60% for both in the APS.

Manufacturers’ targets versus scenario projections
In most regions, the combined EV sales shares targeted by OEMs are either instep with or more ambitious than government pledges in the APS.
In addition to the new targets that OEMs have outlined for zero-emission andelectric vehicle sales for LDVs (see Electrification plans by original equipment
manufacturers), several announcements were made by heavy-duty OEMs in thepast year. In the United States, Navistar announced targets of 50% zero-emission
new vehicle sales by 2030 and 100% by 2040. In China, carbon neutrality (rather
than new energy vehicle [NEV] sales shares) targets of heavy-duty OEMs havetypically been at the group or brand level; Dongfeng, BAIC Group, FAW, and SAIC
have set targets for carbon peaking, carbon neutrality or net zero emissions, orsome combination of the three.

PAGE | 119

IEA. CC BY 4.0.

In the LDV market, OEM announcements are most ambitious in Europe, androughly equally ambitious in the United States and China. The corporate targets
in all three markets have followed announcements of policy ambition andcommitments to transition to net zero emissions by 2050 in the United States andthe European Union and by 2060 in China (Figure 3.5), showing how policy
ambitions can spur corporate announcements.

Global EV Outlook 2023
Catching up with climate ambitions

Prospects for EV deployment

In contrast, pivotal policies passed over the past year in the United States(including the IRA) have thus far not translated into OEMs in North America raising
their announced level of ambition for electric cars and vans (with the exception ofGM’s near-term EV sales targets). However, the new legislation has encouraged
OEMs to make massive investments in EV batteries and production facilities
based in North America.
Figure 3.5.

Original Equipment Manufacturer targets and sales shares in the Stated
Policies and Announced Pledges scenarios, 2030

Sales share

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

EuropeUnitedStates

China

Japan

Light-duty vehicles
Range of OEM declarations (estimate)
Announced Pledges Scenario (2030)

World

Europe(EU+EFTA)

UnitedStates

China

Medium- and heavy-duty trucks
Stated Policies Scenario (2030)
2022
IEA. CC BY 4.0.

Notes: OEM = original equipment manufacturer. For medium- and heavy-duty trucks, OEM pledges cover the European
Union and the European Free Trade Association (EFTA) whose members are Iceland, Liechtenstein, Norway and
Switzerland. The figure compares OEM targets for heavy-duty vehicles (HDVs) (which, for some OEMs, include buses)
relative to IEA projections for zero-emission medium- and heavy-duty truck sales (including fuel cell electric vehicles).
Since annual sales of trucks substantially outnumber sales of buses, achieving HDV targets will require selling zeroemission trucks, which is currently more challenging than selling electric buses. The regional average market share in 2030
is calculated by collating announcements that explicitly mention ZEV market shares or ZEV sales by the top 10-25 OEMs ineach region. Electric bus and truck registrations and stock data can be interactively explored via the Global EV Data
Explorer.
Sources: IEA analysis based on country submissions, complemented by ACEA; EAFO; EV Volumes.

Zero-emission vehicle announcements by manufacturers tend to follow major policy
announcements, often surpassing policy ambitions as articulated in the Announced
Pledges Scenario.

China

PAGE | 120

IEA. CC BY 4.0.

In a market where EV sales shares currently exceed government targets,projected sales in the STEPS and APS are well aligned with OEM ambitions. New
targets were announced by Geely, SAIC-GM-Wuling, BAIC Group and FAWGroup in 2022, and BYD ended production of conventional internal combustion
engine (ICE) vehicles in early 2022 (see Electrification plans by original equipment
manufacturers).

Global EV Outlook 2023
Catching up with climate ambitions

Prospects for EV deployment

Europe
The electrification plans of OEMs anticipated the adoption of the new EU CO2standards for cars and vans, with the result that combined OEM ambitions roughlymatch or exceed the 2030 electric LDV sales share in the STEPS. New LDV
electrification ambitions in the European market have been announced by Ford,
Volkswagen, and BMW (see Electrification plans by original equipment
manufacturers). Heavy-duty vehicle makers are most ambitious about theEuropean market, with targets reaching around 40% zero-emission vehicles sales
in 2030. This exceeds what is projected in the STEPS and APS, despite theEuropean Commission’s proposal for a 100% zero-emission target for city busesfor 2030, and a 90% CO2 reduction target for trucks for 2040.

United States
In the US LDV market, OEM ambitions match or exceed the government’s targetof 50% EV sales by 2030. However, OEM ambitions in the heavy-duty sector lag
behind what is projected in the APS, despite the targets announced by Navistar in
2022. In part this is due to the United States becoming one of eleven new country
signatories to the Global MoU on Zero-Emission Medium- and Heavy-Duty
Vehicles in the past year, which recently increased ambition.

Battery demand
Global battery demand continued to grow in 2022
Global EV battery demand increased by about 65% in 2022, reaching around
550 GWh, about the same level as EV battery production. The lithium-ion
automotive battery manufacturing capacity in 2022 was roughly 1.5 TWh for theyear, implying a utilisation rate of around 35% compared to about 43% in 2021.
Battery demand is set to increase significantly by 2030, reaching over 3 TWh in
the STEPS and about 3.5 TWh in the APS. To meet that demand, more than
50 gigafactories (each with 35 GWh of annual production capacity) would beneeded by 2030 in the STEPS in addition to today’s battery production capacity.
This increases to close to 65 new gigafactories to meet 2030 demand in the APS.
According to Benchmark Mineral Intelligence (as of March 2023), the announced
battery production capacity by private companies for EVs in 2030 amounts to
6.8 TWh, plenty sufficient to meet demand in both the STEPS and APS. In the
NZE Scenario, battery demand reaches over 5.5 TWh in 2030. Assuming an
average utilisation rate of battery production facilities of 85%, 6 announced
capacity in 2030 narrowly covers what is needed in the NZE Scenario.

In 2022, battery manufacturer CATL averaged a capacity utilisation rate of 83.4% for the year.

PAGE | 121

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6

Global EV Outlook 2023
Catching up with climate ambitions

Required and announced expansions of battery manufacturing capacityby scenario, 2030
TWh/year

Figure 3.6.

Prospects for EV deployment

8
7
6
5
4
3
2
1
0

STEPS
DemandAPS

NZEResidual capacity

Announced capacity

IEA. CC BY 4.0.
Notes: STEPS = Stated Policies Scenario; APS = Announced Pledges Scenario; NZE = Net Zero Emissions by 2050
Scenario. Announced capacity includes Tier 1 and Tier 2 battery manufacturers. Manufacturing capacity needed to meetprojected demand is estimated using a utilisation rate of 85%. Residual capacity therefore represents the manufacturing
capacity that would remain unused on average.
Source: Announced capacity based on data available as of March 2023 from Benchmark Mineral Intelligence.

Announced battery manufacturing capacity in 2030 narrowly covers what would be
required to fulfil demand for EV batteries in the Net Zero Scenario.

China is expected to dominate demand for EV batteries up to 2025, in both the
STEPS and the APS. However, in the APS, China’s share of EV battery demand
declines to about 35% in 2030, from over 55% in 2022, due to significant growthin EV sales in the United States, Europe and other markets.

TWh/year

Figure 3.7.

Projected battery demand by mode and region, 2022-2030
By mode

6
5

5

4

4

3

3

2

2

1

1

0

STEPS APS STEPS APS
2022
LDV

2025
Two/three-wheeler

By region

6

NZE

2030
Bus

0

STEPS
2022

Trucks

China

APS

STEPS

2025
Europe

APS

NZE

2030
United States

Other

GlobalIEA. CC BY 4.0.
Notes: STEPS = Stated Policies Scenario; APS = Announced Pledges Scenario; NZE = Net Zero Emissions by 2050
Scenario; LDV = light-duty vehicle.

PAGE | 122

IEA. CC BY 4.0.

Battery demand increases more than sixfold from 2022 to 2030 in the Announced Pledges
Scenario and tenfold in the Net Zero Scenario.

Global EV Outlook 2023
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Prospects for EV deployment

Electric cars and vans are expected to continue to dominate total battery demandfor EVs, accounting for around 90% of demand in both scenarios. In the APS,
battery demand is projected to reach 120 GWh for buses and 160 GWh for
two/three-wheelers in 2030. Battery demand for trucks increases significantly,
reaching about 80 GWh in the STEPS and 170 GWh in the APS by 2030.

Charging infrastructure
The projected deployment of charging infrastructure is underpinned by two main
trends. The first is that home or depot charging is the preferred option for EV
charging, as it tends to be slow charging (which is more affordable than fast
charging) and because these locations are conducive to overnight charging. Slowhome or depot charging is also compatible with smart charging and vehicle-to-grid
operations, and generally puts less strain on the grid than faster charging. As such,it is assumed most LDV charging occurs at home, if the owner has access toresidential charging, and that electric HDV fleet owners will install depot charging
for all buses or trucks with driving schedules that allow for overnight depot
charging. However, access to home charging and suitability of depot charging varyacross regions and over time.
Secondly, it is assumed that public and opportunity chargers will gain more
importance over time as EV adoption increases. For LDVs, it is assumed that as
the stock of electric cars increases, a smaller proportion of owners will haveaccess to home charging. For HDVs, it is assumed that as technologies mature,
more electric HDVs will be used on longer-range routes. The deployment of publiccharging should anticipate and enable electrification of these segments.

Requirements for light-duty vehicle charging
Today, the majority of electric car and van charging relies on private chargers,
mainly at the driver’s residence. Early adopters of electric cars and vans havetended to live in single-family detached homes, where home charging is moreconvenient and more affordable than using public chargers. For example, around
80% of EV owners in the United States live in single-family homes. Assuming thataccess to home charging covers 50-80% of the electric LDV fleet, varying
according to the share of population residing in dense urban areas, there were an
estimated 17.5 million home chargers in 2022. The stock of home chargers
increases to 135 million in 2030 in the STEPS and 145 million in the APS.

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To strengthen EV adoption across population segments that live in multi-unit
dwellings, where charger availability may be limited, access to public andworkplace charging becomes increasingly important. The stock of workplacechargers increases about eightfold by 2030 across the scenarios, while thenumber of public chargers increases around fivefold.

Global EV Outlook 2023
Catching up with climate ambitions

Figure 3.8.

Light-duty vehicle charger installations by number and capacity, 20222030
Stock

2.4
Installed capacity (TW)250
Number of chargers (mllion)

Prospects for EV deployment

200
150
100
50

Capacity

2.0
1.6
1.2
0.8
0.4

0
2022

STEPS APS
2025
Private - home

0.0

STEPS APS
2030
Private - work

STEPS APS STEPS APS
2022
2025
2030
Public - slow
Public - fast

IEA. CC BY 4.0.
Notes: STEPS = Stated Policies Scenario; APS = Announced Pledges Scenario; LDV = light-duty vehicle. Regional
projected electric vehicle supply equipment (EVSE) stock data can be interactively explored via the Global EV Data
Explorer.

By 2030, public charging points represent fewer than 10% of charging points for light-duty
vehicles, but 40% of charging capacity.

By 2030, the total installed LDV charger capacity grows more than ninefold to
1.9 TW in the STEPS, and to more than 2 TW in the APS. For reference, the total
installed capacity of solar PV worldwide in 2021 stood at less than 1 TW. The
capacity of public fast chargers grows at the fastest rate, increasing fifteen-fold by2030 in the APS, despite the stock of public fast chargers increasing only aroundfivefold. In 2030, the average capacity of fast chargers is about 13 times that of
public slow chargers and over 20 times that of private (home and workplace) slow
chargers.

PAGE | 124

IEA. CC BY 4.0.

In 2030, less than 20% of the LDV stock is electric in the APS in most countries.
As a result, it is expected that the majority of EV owners in 2030 will continue tohave access to residential chargers, and the majority (around 60%) of electricity
delivered to electric cars and vans will come from these home chargers. Publicchargers provide about 30% of the electricity needed to power the electric LDV
fleet worldwide in 2030.

Global EV Outlook 2023
Catching up with climate ambitions

Electricity delivered to electric light-duty vehicles by charger type, 20222030

2022

Figure 3.9.

Prospects for EV deployment

2025

STEPS

APS

2030

STEPS

APS
0%

20%

40%

60%

80%

Private - home

Private - work

Public - slow

Public - fast

100%

IEA. CC BY 4.0.
Notes: STEPS = Stated Policies Scenario; APS = Announced Pledges Scenario. Home and workplace chargers are slow
chargers that provide power less than or up to 22 kW. Fast chargers provide more than 22 kW.

The share of electricity for electric cars and vans delivered by public chargers increases to
30% by 2030.

Regional trends in public charging infrastructure for carsand vans
Public charging projections are based on the general trend of a decreasing ratioof charging points per EV over time as the market matures and the system is
optimised, while maintaining reasonable charging capacity per EV.

PAGE | 125

IEA. CC BY 4.0.

At the end of 2022, China accounted for about 50% of the electric LDV stock and
65% of public LDV chargers. China is expected to remain a leader in publiccharger deployment to 2030, in part due to limited home charger access. In 2030,
the stock of public LDV fast chargers reaches almost 5 million in the APS fromless than 1 million in 2022, and China’s share reduces from about 85% of public
fast chargers to 70%, as other regions build out their network to keep pace with
EV deployment targets. The number of public slow chargers remains higher thanfast chargers in both scenarios, increasing from about 1.8 million in 2022 to
8 million in 2030 in the STEPS and over 8.2 million in the APS.

Global EV Outlook 2023
Catching up with climate ambitions

Prospects for EV deployment

5

0.05

4

0.04

3

0.03

2

0.02

1

0.01

0

STEPS
2022
China

APS

2025
Europe

STEPS

APS

0.09

8

0.08

7

0.07

6

0.06

5

0.05

4

0.04

3

0.03

2

0.02

1

0.01

0

0

STEPS
2022

2030
United States

Slow chargers

9

Japan

India

APS

2025

Other countries

STEPS

APS

EVSE/EV

0.06

MillionFast chargers

6

EVSE/EV

MillionFigure 3.10. Number of public light-duty vehicle chargers installed by region, 20222030

02030
EVSE/EV (right axis)
IEA. CC BY 4.0.

Notes: STEPS = Stated Policies Scenario; APS = Announced Pledges Scenario; EVSE = electric vehicle supply
equipment. Regional projected EVSE stock data can be interactively explored via the Global EV Data Explorer.

The number of publicly accessible light-duty vehicle chargers increases from about
3 million in 2022 to around 13 million in 2030 in the Announced Pledges Scenario.

The total number of public chargers needed to support LDV electrification in China
in 2030 is estimated to be around 7.5 million, with a fairly even split between fastand slow chargers. In 2025, the stock of electric vehicle supply equipment alreadyexceeds 4 million charging points. In terms of targets, the China National
Development and Reform Commission has said that charging infrastructure
should be sufficient to meet the needs of more than 20 million EVs by 2025.
However, in both scenarios, the projected stock of electric cars and vans in China
in 2025 is over 40 million. In the IEA scenarios there is therefore a ratio of overnine electric LDVs per public charging point in 2025, slightly higher than the eight
electric LDVs per public charging point witnessed in 2022.
In Europe, the stock of public LDV chargers increases to around 2.4 million in 2030
in both the STEPS and APS, up from about half a million in 2022. In bothscenarios, about 80% of the European public charging stock is in the European
Union, or around 2 million chargers in 2030.

PAGE | 126

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In March 2023, the European Parliament and Council provisionally agreed to the
proposed Alternative Fuels Infrastructure Regulation (AFIR), which setsrequirements for the total power capacity to be provided by public charging
infrastructure based on the size of the registered fleet and coverage requirements
for the trans-European network-transport (TEN-T). In the APS, the stock share ofGlobal EV Outlook 2023
Catching up with climate ambitions

Prospects for EV deployment

electric LDVs reaches over 10% for BEVs and 5% for PHEVs, while the publiccharging capacity averages about 1.6 kW per EV.
The United Kingdom has announced a strategy to deliver the charging
infrastructure to support a 2030 phase-out of the sale of new petrol and diesel carsand vans, which includes the target of at least 300 000 public chargers by 2030
and a minimum of 6 000 fast chargers by 2035. In the APS, the stock of publicchargers reaches around 280 000 in 2030, of which about 80 000 are fast
chargers. This means that the share of fast chargers in the total public electricvehicle supply equipment stock increases to around 30%, from 20% in the past
few years. The number of electric LDVs per charging point is around 35 and thecharging capacity is around 1.5 kW per EV.
In the United States, the National Electric Vehicle Infrastructure Formula Program,established by the IIJA of 2021, will distribute up to USD 5 billion in funds from2022-2026 to support the development of an EV charging network, with a targetof 500 000 chargers. In the APS, this level of public electric vehicle supply
equipment deployment is required before the end of 2025, and the number ofchargers reaches over 1.3 million in 2030. In 2030, there are about 30 electric
LDVs per charging point.
Japan’s Green Growth Strategy sets a target of installing 150 000 charging points
by 2030, including 30 000 fast chargers, with the goal of achieving the same levelof convenience as refuelling gasoline vehicles. In the APS, the stock of LDV
charging points reaches over 200 000 in 2030, of which about 70 000 are fast
chargers. Such a ratio increases the share of fast chargers only a few percentage
points, from about 30% in 2022 to 34% in 2030.
In India, FAME II provides financing and sets objectives for charging infrastructure,for example that chargers be established every 25 km along major highways. In
March 2023, the Ministry of Heavy Industries also announced financial assistancefor upstream electric vehicle supply equipment infrastructure. In the APS, the stockof public electric LDV charging points reaches 550 000 in 2030, meaning there arefewer than 15 electric LDVs per charging point.

Requirements for heavy-duty vehicle charging
In general, slow charging of EVs is cheaper than fast or ultra-fast charging. For
HDVs, overnight charging at bus and truck depots is the most convenient way tocharge at rates of less than 350-400 kW, which would require close to a one-toone ratio of depot chargers per electric HDV.

PAGE | 127

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Battery electric trucks and buses with daily ranges that exceed what can beprovided from an overnight charge will also need to charge during the day. This
daytime charging can take place at the depot or at an opportunity charger (either
at public or semi-public charging stations, or at destinations). Destination chargers

Global EV Outlook 2023
Catching up with climate ambitions

Prospects for EV deployment

can be installed at locations where the vehicle has planned idle time, such as
distribution centres where trucks are parked for loading and unloading, or at
terminal bus stops. For long-distance applications, such as intercity bus routes
and long-haul trucking, some charging will likely need to take place along
highways during breaks.
Through the remainder of this decade, the adoption of electric HDVs is expected
to centre on city buses and urban and regional delivery applications with shortrange routes (under 200 km/day), so that operations do not need to depend on
opportunity charging. However, as the electrification of HDV segments that travel
longer daily distances increases over time, opportunity chargers – especiallyhighway charging – will be required. High-voltage connections that may berequired for HDV opportunity chargers have long lead times, and so planning isneeded in the short-term to ensure adequate availability in the medium- to longterm.
Figure 3.11. Heavy-duty vehicle charger stock and capacity by type, 2022-2030
Capacity

6

GW

Million

Stock

5

600
500

4

400

3

300

2

200

1

100

0

STEPS
2022

APS

2025
Bus - depot

STEPS

0

APS

2030

STEPS
2022

Bus - opportunity

Truck - depot

2025

APS

STEPS

APS

2030
Truck - opportunity
IEA. CC BY 4.0

Notes: HDV = heavy-duty vehicle; STEPS = Stated Policies Scenario; APS = Announced Pledges Scenario; EVSE =electric vehicle supply equipment. Charger stock in 2022 is estimated based on the number of electric buses and trucks.

The stock of charging points for heavy-duty vehicles increases more than sixfold from 2022
to 2030 in the Announced Pledges Scenario.

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IEA. CC BY 4.0.

In the STEPS, the number of bus depot chargers increases from about 800 000
in 2022 to 2.5 million in 2030, reaching a total capacity of around 250 GW. The
number of opportunity chargers needed for buses in 2030 is relatively low,
assuming that buses travelling on short routes are electrified first; the stock ofopportunity bus chargers reaches around 5 000, with an installed capacity of justover 1.2 GW. In the APS in 2030, the stock of depot bus chargers is around3 million, reaching a capacity of about 315 GW, while the number of opportunity
bus chargers is only slightly more than 6 500 (1.6 GW of capacity).

Global EV Outlook 2023
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To power the growing stock of electric trucks, the number of depot chargers
increases from around 300 000 today to 3.5 million in 2030 in the STEPS and
4.2 million in the APS. The installed capacity of truck depot chargers is about
310 GW in the STEPS and 380 GW in the APS in 2030. As with buses, the numberof depot chargers needed in 2030 is far greater than the number of opportunity
chargers. In the STEPS, the number of opportunity truck chargers is about 13 500(6.5 GW installed capacity), increasing to 25 000 (13 GW installed capacity) in the
APS in 2030.

Impact on energy demand and emissions
Electricity demand
The global EV fleet consumed about 110 TWh of electricity in 2022, which equatesroughly to the current total electricity demand in the Netherlands. Almost a quarterof the total EV electricity consumption was for electric cars in China, and a fifth forelectric buses in the same country. Electricity demand for EVs accounts for lessthan half a percent of current total final electricity consumption worldwide, and stillless than one percent of China’s final electricity consumption.

TWh

Figure 3.12. Electricity demand by mode and region, 2022-2030
Regional breakdown

Road mode breakdown

1 800
1 500
1 200
900
600
300
0

2022
LDV

2025
2030
STEPS

2025
2030
APS

Two/three-wheeler

Bus

2030
NZE

Truck

2022

2025 2030
STEPS
China
United StatesJapan

2025 2030 2030
APS
NZE
EuropeIndia
Other countries
IEA. CC BY 4.0.

Notes: STEPS = Stated Policies Scenario; APS = Announced Pledges Scenario; NZE = Net Zero Emissions by 2050
Scenario; LDV = light-duty vehicle; RoW = rest of the world. The analysis is carried out for each region in the transportmodel within the IEA's Global Energy and Climate Model (GEC-Model) separately and then aggregated for global results.
For the Net Zero Emissions by 2050 Scenario, only global values are reported. Regional data can be interactively explored
via the Global EV Data Explorer.

Electricity demand for EVs accounts for only a minor share of global electricity
consumption in 2030 in the Announced Pledges Scenario.

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Electricity demand for EVs is projected to reach over 950 TWh in the STEPS andabout 1 150 TWh in the APS in 2030. Notably, electricity demand in the APS is

Global EV Outlook 2023
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Prospects for EV deployment

about 20% higher than in the STEPS, despite the stock of EVs only being about
15% higher. This is in part due to higher rates of electrification in many highaverage vehicle mileage markets such as the United States, but also to greater
electrification in the truck and bus segments, which contribute incrementally tovehicle stock, but have a high electricity demand per vehicle. In addition, it isassumed that in countries with net zero pledges, a larger share of energy
consumption in PHEVs is provided by electricity (as opposed to gasoline ordiesel). This is particularly relevant for cars and vans, which account for about twothirds of demand in both scenarios.
By 2030, electricity demand for EVs accounts for less than 4% of global final
electricity consumption in both scenarios. As shown in the World Energy Outlook
2022, in 2030 the share of electricity for EVs is relatively small compared todemand for industrial applications, appliances or cooling and heating.
Share of electricity consumption from electric vehicles relative to final
electricity demand by region and scenario, 2022 and 2030

0.8%Stated Policies
Scenario2030
3.8%

Announced
Pledges Scenario
2030
4.0%

Europe

0.7%

4.7%

5.7%

United States

0.4%

5.4%

6.3%

Japan

0.1%

1.7%

2.2%

India

0.1%

1.7%

2.5%

Global

0.5%

3.2%

3.8%

Country/region

2022

China

Note: Non-road electricity consumption from the World Energy Outlook 2022.

China remains the largest consumer of electricity for EVs in 2030, although its
share of global EV electricity demand decreases significantly from about 55% in2022 to less than 40% in the STEPS, and around 30% in the APS. This reflects
wider adoption of electromobility across other countries in the period to 2030.

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The size of the EV fleet becomes an important factor for power systems in bothscenarios, with implications for peak power demand, transmission and distribution
capacity. Careful planning of electricity infrastructure, peak load management, andsmart charging will be critical. Reducing dependence on fast charging will allow
for optimal planning and resiliency of power systems, mitigating peak power
demand. More than 80% of the electricity demand for electric LDVs in 2030 in bothscenarios is via slow chargers (private and public).

Global EV Outlook 2023
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Prospects for EV deployment

To help policy makers prioritise charging strategies according to the size of their
EV fleet and their power system configuration, the IEA has developed a guiding
framework and online tool for EV grid integration.

Oil displacement
The growing EV stock will reduce oil use, which today accounts for over 90% of
total final consumption in the transport sector. Globally, the projected EV fleet in
2030 displaces more than 5 million barrels per day (mb/d) of diesel and gasoline
in the STEPS and almost 6 mb/d in the APS, up from about 0.7 mb/d in 2022. For
reference, Australia consumed around 1 mb/d of oil products across all sectors in
2021.
However, recent price volatility for critical minerals that are important inputs tobattery manufacturing, and market tension affecting supply chains, are a stark
reminder that in the transition to electromobility, energy security considerations
evolve and require regular reconsideration.
Figure 3.13. Oil displacement by region and mode, 2022-2030
Regional breakdown

mb/d

By region:

China

EuropeBy mode:

LDV

Truck

United States
Bus

Japan

India

Other countries

NZE

APS

2030

STEPS

APS

2025

STEPS

2022

NZE

APS

STEPS

2030

APS

0.0
-1.0
-2.0
-3.0
-4.0
-5.0
-6.0
-7.0
-8.0
-9.0

2025

STEPS

2022

Road mode breakdown

GlobalTwo/three-wheeler
IEA. CC BY 4.0.

Notes: STEPS = Stated Policies Scenario; APS = Announced Pledges Scenario; NZE = Net Zero Emissions by 2050
Scenario; LDV = light-duty vehicle. Oil displacement based on internal combustion engine (ICE) vehicle fuel consumption tocover the same mileage as the EV fleet.

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Oil displacement increases from 0.7 mb/d in 2022 to nearly 6 mb/d in 2030 if pledges
supporting electromobility in road transport around the world are fulfilled.

Global EV Outlook 2023
Catching up with climate ambitions

Box 3.2

Prospects for EV deployment

How much oil really gets displaced by electric vehicles?

Oil displacement through the use of EVs can be estimated by assuming that the
distance (total kilometres) travelled by EVs by segment each year would haveotherwise been travelled by ICE vehicles or hybrid electric vehicles (HEVs) (basedon the stock shares of each). In the case of PHEVs, only the distance covered byelectricity gets included. The stock average fuel consumption of gasoline anddiesel vehicles determines the total liquid fuel displacement, where the biofuel
portion is taken out of the estimate based on regional blending rates. As a result,it can be estimated that in 2022, the stock of EVs displaced 700 000 barrels of oil
per day.
This method of estimation assumes that EVs replace ICE or hybrid vehicles of thesame segment, as opposed to some other means of transport, i.e. an electric car
replaces an ICE car. The accuracy of this assumption is uncertain, in particularwith respect to two-wheelers. In IEA analysis, only two-wheelers that fit the United
Nations Economic Commission for Europe (UNECE) classification of L1 or L3 areconsidered. This definition excludes micromobility options such as electricassisted bicycles and low-speed electric scooters, leading to a significantly lower
stock (around 80% lower) than when including micromobility segments.
Whether or not electric micromobility avoids oil use is uncertain, as it might
displace manual bicycles or walking rather than ICE two-wheelers. At the sametime, there is evidence that in some cases micromobility displaces personal car or
taxi trips. The estimate of the amount of oil use that is avoided by two-wheeled
micromobility therefore strongly depends on the assumptions about the mode thatis being displaced.

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The case of China, which represents over 95% of the global stock of two-wheeled
electric micromobility, is a good example. Assuming that all two-wheeled
micromobility in China replaces conventional ICE two-wheelers would increase oil
displacement by 260 kb/d (or 160%). If instead electric micromobility was assumed
to replace only bus trips, then the total oil displacement from two-wheelers in China
would increase by just 10 kb/d (10%). However, if it was assumed that they
displaced car trips, then oil use avoided by two-wheelers in China would be morethan 1 mb/d higher. Including oil displacement from the two-wheeled electric
micromobility segment in China alone can therefore increase the estimated 2022
global oil displacement from all electric vehicles anywhere from 1% to 160%. But
there is significant uncertainty as to whether any oil is displaced at all.

Global EV Outlook 2023
Catching up with climate ambitions

Prospects for EV deployment

Additional two-wheeler oil displacement in China when accounting for
micromobility segments, 2022
mb/dAssuming micromobility replaces:
0.00

Car trips (100%)

L1/L3 trips (100%)

Bus trips (100%)

Mix: car (25%), bus(55%), L1/L3 (10%)

-0.20
-0.40
-0.60
-0.80
-1.00
-1.20
-1.40

Electric two-wheelers (L1 and L3)

Additional oil displacement from electric micromobility

IEA. CC BY 4.0
Notes: Electric L1 and L3 two-wheelers (based on UNECE classifications) are assumed to replace ICE two-wheelers.
For this analysis, it is assumed micromobility two-wheelers travel on average 10 km/day. The mix shown is based on
findings from an investigation of e-bike use in Kunming, China. The other 10% of the mix is assumed to replace active
transport, and thus does not contribute to oil displacement.
Sources: IEA analysis based on BNEF and Cherry et al. (2016).

Tax revenues
Taxes on petroleum-based road fuels can be a significant source of income forgovernments, 7 and are often used to support investments in transport
infrastructure, such as roads and bridges. Given the levels of oil displacement
discussed above, the transition to EVs will reduce these tax revenues. Additionaltax revenue from electricity will not be sufficient to fully compensate for thisreduction, both because taxes on electricity tend to be lower on an energy basis
and because EVs are more efficient and thus use less energy than ICE vehicles.
In 2022, the transition to electric vehicle stock displaced around USD 11 billion ingasoline and diesel tax revenues globally. At the same time, the use of EVs
generated around USD 2 billion in electricity tax revenue, meaning there was a
net loss of around USD 9 billion. Although China has the greatest stock of EVs,
the greatest impact on tax revenues was seen in Europe, a trend which is
expected to continue into the future. This is because Europe has some of thehighest taxes on gasoline and diesel; for example, the gasoline tax rate inGermany is almost ten times the rate in China.
As the number of EVs increases globally, government fuel tax revenues are
expected to decline, with global net tax losses increasing by around two-and-aWhile the share of total government revenue from fuel taxes may be small, for example it has recently been less than 3%
in the United Kingdom, in many cases it represents a large share of the budget allocations for transportation infrastructure.

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7

Global EV Outlook 2023
Catching up with climate ambitions

Prospects for EV deployment

half times by 2025 in both STEPS and APS. By 2030, this totals about
USD 60 billion in 2030 in the STEPS, and about USD 70 billion in the APS. Europe
is most affected, with fuel tax revenue to decline by around USD 50 billion in 2030
in the APS. Possible tax losses in countries outside of Europe, China and theUnited States increase to more than USD 20 billion, of which Korea represents
about one-third. Impacts in the United States appear limited, with a total net lossof tax revenue of less than half a billion USD in 2030. However, this value is basedon federal tax rates and thus does not represent the full impact at the state level.
In 2022, the state tax rate on gasoline was on average around 70% higher thanfederal rate.
Figure 3.14. Net tax implications of electric vehicle adoption by region, 2022-2030

USD billion

2022

2025
STEPS

40

2030
APS

STEPS

APS

20
0
-20
-40
-60
-80
-100
-120
China

EuropeUnited States

Other

Net tax loss
IEA. CC BY 4.0.

Notes: STEPS = Stated Policies Scenario; APS = Announced Pledges Scenario. Fuel tax rates are assumed to remain
constant. Only federal tax rates are included.
Sources: Analysis based on tax rates from IEA Energy Prices.

Additional tax revenue from electricity demand is not sufficient to balance the effects ofdisplaced oil product consumption on fuel tax revenues.

Governments need to anticipate a reduction in fuel tax revenues and develop new
tax strategies to maintain revenue levels without discouraging the adoption of EVs.
In the short-term, governments can increase tax rates to balance the decline infossil fuel use, for example through a fuel tax escalator. However, this type ofmeasure can be politically unpopular and create equity issues, especially in timesof relatively high oil prices.

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Longer-term measures to stabilise tax revenues that involve deeper reforms in tax
schemes should be gradually phased in to allow for smooth adaptation to newvehicle technologies. For example, these reforms could include coupling higher
taxes on carbon-intensive fuels with distance-based charges. While
comprehensive tax reform can also address vehicle taxes (including vehicle

Global EV Outlook 2023
Catching up with climate ambitions

Prospects for EV deployment

weight-based taxes), an increase in taxes on EVs should only take place when
the EV market is fairly mature, ideally when price parity has been reached.
Importantly, widespread EV adoption will reduce air pollution and GHG emissions,which should reduce health and environmental damage and their associatedsocietal costs. In addition, distance-based charges, such as those that vary bytime, place and vehicle type, could also reduce traffic congestion, noise and roadinfrastructure damage.

Greenhouse gas emissions
In 2022, EVs enabled a net reduction of about 80 Mt of GHG emissions, on a wellto-wheels basis. The biggest savings were achieved from EVs in China, where
almost 30% of global emissions reductions come from the electrification ofpassenger cars in China. As the EV fleet continues to grow, it will contribute tofurther reducing GHG emissions on well-to-wheel basis through 2030. The net
GHG benefit of EVs increases over time as the electricity sector is decarbonised.
The global average GHG intensity of electricity generation and delivery falls from2022 to 2030 by 28% in the STEPS, and by 37% in the APS.
In the STEPS, the net GHG emissions avoided through the use of EVs reaches
nearly 700 Mt CO2-equivalent in 2030. The production of electricity to fuel the EV
fleet in 2030 in the STEPS results in 290 Mt CO2-eq emissions, but this is morethan offset by the avoidance of 980 Mt CO2-eq that would have been emitted froman equivalent ICE vehicle fleet.
In the APS, the GHG emissions reduction benefit of EV adoption increases further,
due to both a higher stock of EVs and a lower GHG intensity of electricity
generation. The net GHG emissions avoided in 2030 are over 770 Mt CO2-eq.

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IEA. CC BY 4.0.

In the STEPS and the APS, electric LDVs as a segment contribute the majority ofemissions avoided from 2022-2030, and the two/three-wheelers segment forms
the next largest contributor. In the NZE Scenario, trucks play a key role indelivering the avoided emissions targets for achieving net zero goals.

Global EV Outlook 2023
Catching up with climate ambitions

Prospects for EV deployment

Figure 3.15. Net avoided greenhouse gas emissions from EV deployment and share of
avoided emissions by mode, 2022-2030

Net GHG emissions (Mt)

Net avoided GHG emissions by scenario
2022
0

2023

2024

2025

2026

2027

2028

2029

2030

- 200
NZE

- 400

APS

- 600

STEPS

- 800
-1 000-1 200Share of cumulative (2022-2030) emissions savings by mode
0%

20%

40%

60%

STEPS

80%

100%
LDVs
2/3Ws

APS

Buses
NZE

TrucksIEA. CC BY 4.0.
Notes: GHG = greenhouse gas; STEPS = Stated Policies Scenario, APS = Announced Pledges Scenario; NZE = Net Zero
Emissions by 2050 Scenario; LDVs = light-duty vehicles; 2/3Ws = two/three-wheelers. Net avoided GHG emissions arecalculated as the total emissions from electricity generation, transmission and distribution and the negative emissions (i.e.
avoided) that the equivalent ICE fleet would have emitted (both upstream and at the tailpipe) if running on fossil fuels.
Projections include fuel economy improvements of ICE and electric vehicles as well as the growing share of renewableelectricity generation, as described in the World Energy Outlook 2022.

PAGE | 136

IEA. CC BY 4.0.

Nearly 25% of the avoided emissions from EVs in the Net Zero by 2050 Scenario can be
attributed to the electrification of heavy-duty vehicles.

Global EV Outlook 2023
Catching up with climate ambitions

Annexes

General annexAbbreviations and acronyms

Advanced Chemistry Cell
Advanced Clean Cars II
European Automobile Manufacturers Association
Advanced Fuel Cells Technology Collaboration Partnership
Alternative Fuels Infrastructure Regulation
Announced Pledges Scenario
Australian dollar
battery-as-a-service
battery electric vehicle
Bavarian Motor Works
Bloomberg New Energy Finance
Build Your Dreams
China Association of Automobile Manufacturers
Canadian dollar
China Automotive Technology and Research Center (CATARC)
Contemporary Amperex Technology Co. Limited
capital expenditure
Connecting Europe Facility
Conference of the Parties
carbon dioxide
China Passenger Car Association
Yuan renminbi
direct current
European Alternative Fuels Observatory
European Free Trade Association
emerging market and developing economy
Environmental Protection Agency
European Union
Euro
electric vehicle
The Climate Group’s EV100 Initiative
Electric Vehicle Initiativeelectric vehicle supply equipment
Faster Adoption and Manufacturing of Electric Vehicles
fuel cell electric vehicle
British pound sterling
IEA’s Global Energy and Climate Model
Global Environment Facility
greenhouse gases

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IEA. CC BY 4.0.

ACC
ACC IIACEA
AFC TCP
AFIR
APS
AUD
BaaS
BEV
BMW
BNEF
BYD
CAAM
CAD
CATARC
CATL
CAPEX
CEF
COP
CO2
CPCA
CNY
DC
EAFO
EFTA
EMDE
EPA
EU
EUR
EV
EV100
EVI
EVSE
FAME II
FCEV
GBP
GEC
GEF
GHG

Global EV Outlook 2023
Catching up with climate ambitions

General Motors
graphite
General Motors
gross vehicle weightheavy-duty vehicle
hybrid electric vehiclehydrogen refuelling station
International Council on Clean Transportationinternal combustion engine
International Energy Agency
Infrastructure Investment and Jobs Act
Incentives for Medium- Heavy-duty Zero-Emission Vehicles
Indian rupee
Initial public offering
Inflation Reduction Act
International Organization for Standardization
Jiangling Motors Corporation Limited
Japanese yen
Korean won
lifecycle assessment
light commercial vehicle
light-duty vehicle
Low-emission zone
lithium iron phosphatelithiumlithium-ion
Megawatt Charging System
Ministry of Industry and Information Technology, China
memorandum of understanding
sodium-ion
nickellithium nickel cobalt aluminium oxide
Nationally Determined Contribution
new energy vehicle
National Electric Vehicle Infrastructure Formula Program
nickel manganese cobalt oxide
lithium nickel manganese cobalt aluminium oxide
Norwegian kroner
nitrogen oxide
Net Zero Emissions by 2050 Scenario
medium- and heavy-duty vehicle
original equipment manufacturer
Portland General Electricplug-in hybrid electric vehicle
passenger light-duty vehicle

PAGE | 138

IEA. CC BY 4.0.

GM
Gr
GM
GVW
HDV
HEV
HRS
ICCT
ICE
IEA
IIJA
iMHZEV
INR
IPO
IRA
ISO
JMC
JPY
KRW
LCA
LCV
LDV
LEZ
LFP
Li
Li-ionMCS
MIITMoU
Na-ion
Ni
NCA
NDC
NEV
NEVI
NMC
NMCA
NOK
NOx
NZE
M/HDV
OEM
PGE
PHEV
PLDV

AnnexesGlobal EV Outlook 2023
Catching up with climate ambitions

PLI
RoW
SAIC
Si-Gr
SEK
SME
STEPS
SUV
TCO
TEN-T
TRL
UNECE
USD
USGS
VAT
VC
VW
WBCSD
WBMS
ZETI
ZEV
2/3W

Annexes

Production Linked Incentive
rest of world
Shanghai Automotive Industry Corporation
silicon-graphite
Swedish kronor
small- and medium enterpriseStated Policies Scenario
sports utility vehicle
total cost of ownershiptrans-European network-transport
Technology Readiness Level
United Nations Economic Commission for Europe
United States dollar
United States Geological Survey
value-added tax
venture capital
Volkswagen
World Business Council for Sustainable Development
World Bureau of Metal Statistics
Zero-Emission Technology Inventory
zero-emission vehicle
two/three-wheeler

Units of measuredegree Celsius
grammes of carbon dioxide
gigatonnes of carbon dioxide
gigawatt
gigawatt-hourkilometrekilowatt
kilowatt-hours
kilotonnes
million barrels per day
million tonnes
million tonnes of carbon-dioxide equivalent
megawatt
tonne of carbon dioxide
tonne of carbon-dioxide equivalent
tonne-kilometre
terawatt
terawatt-hourwatt-hourwatt-hour per kilogramme

PAGE | 139

IEA. CC BY 4.0.

°C
gCO2
Gt CO2
GW
GWh
km
kW
KWh
kt
mb/d
Mt
Mt CO2-eq
MW
t CO2
t CO2-eq
tkm
TW
TWh
Wh
Wh/kg

Global EV Outlook 2023
Catching up with climate ambitions

Annexes

Exchange rates(2022)

1 US dollar (USD) equals:

Australian Dollars

1.44

British Pounds

0.81

Canadian Dollars

1.30

Chinese Yuan Renminbi

6.74

Euros

0.95

Indian rupees

80.40

Japanese Yen

131.50

Korean Won

1291.45

Norwegian Kroner

9.61

Swedish Kronor

10.11

PAGE | 140

IEA. CC BY 4.0.

Currency conversions

International Energy Agency (IEA).

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those of the IEA’s individual Member countries or of any particular funder orcollaborator. The work does not constitute professional advice on any specificissue or situation. The IEA makes no representation or warranty, express or
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and shall not be responsible for any use of, or reliance on, the work.

Subject to the IEA’s Notice for CC-licenced Content, this work is licenced
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This document and any map included herein are without prejudice to the status ofor sovereignty over any territory, to the delimitation of international frontiers andboundaries and to the name of any territory, city or area.
Unless otherwise indicated, all material presented in figures and tables is derived
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