The International Energy Agency (IEA) provides a detailed summary of the global EV industry in an annual publication called the “Global EV Outlook”. The agency’s 2022 report states that the number of electric vehicles sold worldwide rose to 6.6 million in 2021, doubling the number of EVs sold the previous year, and that EV sales growth was primarily led by the People’s Republic of China.
The statistical evidence from 2021 is quite compelling. According to the IEA, China sold more EVs than the entire world sold in 2020, tripling its already substantial EV sales. Europe increased its EV sales by two thirds, while U.S. sales doubled after two consecutive years of 10% declines. China sold 3.3 million EVs, 2.3 million were sold in Europe, and just 630,000 were sold in the United States. The sales figures represent market shares of 17% in Europe, 16% in China, and 4.5% in the United States. Out of 16.5 million EVs estimated to be on the road, China’s fleet accounted for 7.8 million. EV adoption in China continued to accelerate dramatically in the first quarter of 2022, doubling the sales figures recorded during the first quarter of 2021.
The report also states that a large percentage of China’s EVs are battery electric vehicles (BEVs) rather than less efficient plug-in hybrids (PHEVs), many of which fail to generate significant reductions in tailpipe carbon dioxide. In 2021, fully electric BEVs made up a whopping 82% of the new EVs sold in China, while European sales of EVs were evenly split between BEVs and PHEVs. BEVs accounted for 75% of U.S. EV sales in 2021, where increasing Tesla sales dominate the green auto market. The percentages are fairly consistent with long-term trends. The IEA estimates that, in China, 80% of the existing EVs on the road in 2021 were BEVs, 55% of existing European EVs were BEVs, and 65% of existing U.S. EVs were BEVs.
The IEA cites a variety of forces that are driving the dramatic rise in global EV sales. The agency views sustained government policy support as a primary cause, noting that many countries have now pledged to phase out internal combustion engines, and that subsidies and incentives for EVs nearly doubled in 2021, rising to almost $30 billion. They also credit bold electrification pledges from automakers, some of which exceed government targets, and ongoing efforts to roll out new EV models. The IEA estimates that 450 EV models were available in 2021, five times the number that were available in 2015.
The rapid acceleration of EV adoption in China is not entirely surprising. In the report’s Executive Summary, the IEA states that, “In China, electric cars are typically smaller than in other markets. This, alongside lower development and manufacturing costs, has contributed to decreasing the price gap with conventional cars. In 2021, the sales-weighted median price of EVs in China was only 10% more than that of conventional offerings, compared with 45-50% on average in other major markets.” They go on to say that China has rolled out new charging infrastructure faster than other regions. Chinese consumers also had 300 EV models to choose from, compared with 184 in Europe and only 65 in the United States.
China is often portrayed as a laggard in the international effort to defeat climate change, but their extraordinary EV adoption rates tell a different story.
