Global electric vehicle outlook – four perspectives

Approximately 1.26 million electric vehicles were on the world’s roads by the end of 2015.
Published: Fri 24 Jun 2016

During 2015 the ‘symbolic’ 1 million electric vehicle milestone was surpassed, with the year closing at 1.26 million, according to the latest Global EV Outlook 2016.

This represents significant growth, amounting to an almost 100% increase over 2014 and more than a thousand-fold from the hundreds that were in use just a decade ago.

With this growth the market shares of EVs rose above 1% in seven countries in 2015: Norway, the Netherlands, Sweden, Denmark, France, China and the United Kingdom. Market shares reached 23% in Norway and nearly 10% in the Netherlands.

Evolution of global EV stock 2010-2015 (Source IEA)

In 2015 also, China emerged as the main EV market worldwide, overtaking the US for the first time.

Nevertheless, the US continues to have the largest number of EVs on the road, with almost one-third of the world total.

In this context the term ‘EV’ includes both battery electric vehicles and plug-in hybrids. The Outlook covers 40 countries representing about 98% of the global EV Stock.

Growth of EVs – policies and batteries

This growth of EVs can be attributed to ambitious targets and policy support which have lowered vehicle costs, extended vehicle range and reduced consumer barriers in a number of countries, according to the Outlook.

For example, a notable development in 2015 was the substantial new implementation of EV supply equipment, which was on par with the growth of the vehicle stock. Through public policies, publicly accessible charging development is being encouraged through direct investment and public-private partnerships. This is occurring in both in urban areas and beyond, with charging networks aiming to enable long-distance travel on EVs even at the continental scale, as in the case of the European Union (EU).

Ultimately there are two main drivers for the EV growth – policy support mechanisms and battery developments.

Some policy support mechanisms are listed in the table. Vehicle purchase incentives are considered the most effective and every country has one or more forms of these. They also all have increasingly stringent tailpipe emission standards, as well one or more EV use and circulation incentives.

Policy support mechanisms in selected countries (Source IEA)

The second driver is the battery developments, with improvements in performance and dost reductions that have improved affordability, given the battery accounts for up to a third of the vehicle purchase price. With increasing volumes, prices have dropped rapidly – in 2015 down to almost a quarter of the 2010 price. At the same time the battery energy density – and therefore the vehicle range – has increased by over a factor of three. For example the Chevrolet Bolt and Tesla Model 3, both due out within the next few months, are being marketed with ranges of in excess of 300km. [Tesla Model 3 – The ‘Apple’ of EVs]

Evolution of battery energy density and cost (Source IEA)

These trends will continue with the 2020-22 timeframe targeted by Tesla and GM to reach the US$100/kWh cost target, while the US Department of Energy has targeted US$125/kWh by 2022 and a battery energy density of 400Wh/L.

EVs and decarbonization

While one million-plus is a lot of EVs, it is nevertheless still only 0.1% of the almost 1 billion and growing passenger vehicles on the world’s roads.

The Clean Energy Ministerial’s Electric Vehicle Initiative (EVI) set a target of 20 million EVs on the road by 2020, while the 2030 goal of the COP 21 Paris Agreement is 100 million EVs. Those of the International Energy Agency’s 2DS (2 degree scenario) are even higher, at 140 million EVs by 2030 and nearly 900 million by 2050.

Deployment scenarios for EVs to 2030 (Source IEA)

Meeting the latter targets imply that the global stock of EVs should maintain annual growth rates above 25% by 2025 and in the range of 7% to 10% between 2030 and 2050 – and these are within reach, the Outlook claims. However, as the publication also points out, achieving sustainability goals also requires a large scale diffusion of electric 2-wheelers and buses beyond the Chinese market, which currently has the strongest deployment of these, as well as electrified road freight vehicles, starting from urban deliveries.

Policies are needed to address the vehicle, charging, system operator/demand aggregator linkages to ensure EVs deliver positive flexibility impacts.

Moreover, while EVs are able to deliver on greenhouse gas emission reductions, the benefit will only be maximized when they are coupled for charging with a low-carbon power generation mix.

Further reading

IEA: Global EV Outlook 2016