Umair Gaines
Electric vehicles are becoming more popular, with sales increasing globally. In 2023, electric vehicles saved over 220 million tonnes of GHG emissions worldwide, compared to 80 million in 2022. The market for used electric vehicles is also growing, with prices becoming more affordable, and this is expected to promote electric mobility to the masses. Electric vehicles are the key technology to decarbonise road transport, a sector that accounts for around one-sixth of global emissions. However, despite their growing popularity, electric vehicles are not yet a global phenomenon, with sales in some countries, especially developing and emerging countries, remaining slow due to higher purchase costs and a lack of charging infrastructure.
| Characteristics | Values |
|---|---|
| Electric vehicles becoming more popular | Yes |
| Electric vehicles sales share in 2030 | 42-58% |
| Electric vehicles sales share in 2035 | 66% |
| Electric vehicles sales share in 2050 | 95% |
| Electric vehicles sales in 2023 | 20% |
| Electric vehicles sales in the US in 2023 | 16.3% |
| Electric vehicles sales in Thailand | 10% |
| Electric vehicles sales in China and India (electric three-wheelers) | 95% |
| Electric vehicles sales in the US (second-hand) | 70% |
| Electric vehicles sales in the EU (second-hand) | 80% |
| Electric vehicles sales in the US (low-income households, new cars) | 17% |
| Electric vehicles emissions savings in 2022 | 80 million tonnes of GHG |
| Electric vehicles emissions savings in 2023 | 220 million tonnes of GHG |
| Electric vehicles emissions savings by 2035 | 2 Gt of CO2-eq of GHG |
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What You'll Learn
Electric vehicles are becoming more affordable
The growing competition in the electric vehicle market has led to a decrease in prices, as manufacturers strive to attract customers with competitive offerings. Lower raw material costs have also played a role in reducing the overall price of electric vehicles. Additionally, improvements in manufacturing processes have made it more economical to produce these cars.
Second-hand markets for used electric cars are becoming increasingly popular, especially in emerging and advanced economies. As newer models of electric vehicles become available, early adopters are selling or upgrading their existing cars, creating a larger pool of used vehicles. This trend is similar to the traditional internal combustion engine (ICE) vehicle market, where buying second-hand is often the primary method of acquisition, particularly for low- and middle-income groups.
The availability of used electric vehicles is driving down prices and making them more affordable for consumers. In 2023, the market for used electric vehicles included about 800,000 vehicles in China, 400,000 in the United States, and over 450,000 in several European countries. The prices of used electric cars are becoming more competitive compared to conventional combustion engines, making them a more attractive option for those seeking cost-effective transportation.
In addition to the growing second-hand market, government incentives and subsidies are also contributing to the affordability of electric vehicles. Federal tax credits, state incentives, and budget-neutral "feebate" programs are in place to encourage the adoption of electric vehicles and reduce their upfront costs for consumers. These financial incentives, combined with the decreasing prices of electric cars, are making them a more viable option for a broader range of buyers.
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Electric vehicles are the key to decarbonising road transport
Electric vehicles are becoming more popular, with sales increasing and an expanding global market. They are the key to decarbonising road transport, a sector that accounts for around one-sixth of global emissions. Electric vehicle (EV) technology is rapidly improving, with longer battery lives, shorter charging times, and more competitive prices. The second-hand market for EVs is also growing, making them more accessible to a wider range of consumers.
In 2023, EV use saved over 220 million tonnes of GHG emissions globally, compared to 80 million in 2022. This is significant progress towards reducing emissions and achieving net-zero targets. By 2035, it is predicted that using EVs could help avoid 2 Gt of carbon dioxide equivalent (CO2-eq) of GHG emissions. This is in line with ambitious policies and targets set by governments and manufacturers to increase EV adoption and reduce emissions.
To further accelerate the transition to EVs, policy-led deployment and infrastructure development are crucial. Governments can support the electrification of road transport by prioritising the development of charging infrastructure, especially for heavy-duty electric vehicles. Incentives such as subsidies, tax credits, and feebate programmes can also make EVs more affordable and attractive to consumers.
The growth of the EV market is evident in both advanced and emerging economies. In Thailand, electric car registrations quadrupled year-on-year, reaching a notable 10% sales share. China and India account for nearly 95% of global sales in electric three-wheelers. In the United States, electrified vehicles, including hybrids and fully electric, are becoming more desirable, with seven out of the top ten picks for 2024 in the influential Consumer Reports being EVs.
As the EV market continues to mature, prices will become more competitive, and the reliance on direct subsidies will decrease. The increasing availability of second-hand EVs and the emergence of new EV manufacturing hubs, such as Thailand, will also contribute to making EVs more accessible and affordable worldwide.
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The emergence of second-hand markets for used electric cars
Electric vehicles (EVs) are becoming more popular globally, with healthy growth in sales, improved range, wider model availability, and increased performance. This growth is particularly notable in countries like China, the United States, and Thailand, where sales of electrified vehicles, including hybrids and fully electric cars, are on the rise.
As the EV market matures, second-hand markets for used electric cars are also emerging. This development is similar to the pattern observed in the Internal Combustion Engine (ICE) vehicle market, where buying second-hand is often the primary method of acquiring a car, especially in emerging and advanced economies. The emergence of second-hand markets for used EVs is critical to fostering mass-market adoption, especially with new electric cars remaining expensive for many consumers.
In Australia, for example, the cost of second-hand electric cars is tumbling faster than petrol cars, with a three-year-old electric car potentially costing significantly less than its petrol-powered counterpart. However, this doesn't necessarily mean that used electric cars offer better value, as there can be hidden expenses, such as insurance and repairs, due to the complexity and cost of fixing electric vehicles.
Despite these potential drawbacks, the availability of used EVs on the market is increasing. Models like the Nissan Leaf, Mini Electric, BYD Atto 3, and Tesla Model 3 can now be found on the second-hand market, providing consumers with more options to choose from. As the EV stock ages in advanced markets, it is likely that the trade of used EVs will expand internationally, providing consumers in emerging markets and developing economies (EMDEs) with access to more affordable electric vehicles.
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Electric vehicles are becoming more desirable than their gasoline counterparts
There are several factors contributing to the increasing desirability of electric vehicles. Firstly, the range of electric vehicles has improved significantly, with cars that can travel more than 300 miles on a single charge becoming commonplace. This addresses the range anxiety that has historically been a barrier to the adoption of electric vehicles. Additionally, charging times are decreasing, and the number of fast-charging stations is growing. The development of ultra-fast charging infrastructure further enhances the convenience of electric vehicles.
The performance and model availability of electric vehicles have also widened, providing consumers with a diverse range of options to suit their needs and preferences. Electric vehicles are also becoming more affordable. Falling prices can be attributed to increased competition among manufacturers, lower raw material costs, and advancements in manufacturing processes. Government incentives, such as federal tax credits and state subsidies, further reduce the cost of electric vehicles, making them more accessible to a wider range of buyers.
The environmental benefits of electric vehicles are also contributing to their desirability. In 2023, electric vehicles saved an estimated 220 million tonnes of greenhouse gas emissions globally, significantly contributing to the goal of decarbonising road transport, which accounts for about one-sixth of global emissions. The public debate around the environmental impact of electric vehicles versus internal combustion engine cars is shifting in favour of electric vehicles. As a result, electric vehicles are increasingly viewed as a sustainable and environmentally responsible choice.
The emergence of second-hand markets for used electric vehicles is another factor in their growing desirability. As newer models are released, early adopters are selling their used electric cars, creating a growing pre-owned market. This trend, similar to the pattern seen with internal combustion engine vehicles, is crucial for fostering mass-market adoption, especially in emerging and advanced economies where buying second-hand is often the primary method of acquiring a car. The availability of used electric vehicles at lower prices makes them more accessible to cost-conscious buyers.
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Electric vehicle sales are growing in emerging markets
Electric vehicles (EVs) are becoming increasingly popular, with the global market experiencing significant growth and development. This growth is driven by several factors, including consumer preferences for environmentally friendly options, advancements in technology and battery prices falling, government initiatives and incentives, and local circumstances.
While major markets like China, the US, and Europe have been witnessing rapidly growing EV sales, the focus now shifts to emerging economies with large car markets, where subsidies and incentives still play a crucial role in further growth. Countries like Thailand, India, and Brazil are experiencing record sales as more low-cost electric models are launched, targeting local buyers. In Thailand, electric car registrations more than quadrupled year-on-year, reaching a notable 10% sales share, comparable to the share in the United States. This growth is attributed to new subsidies, lower taxes, and the increasing presence of Chinese carmakers. Thailand aims to become a major EV manufacturing hub, attracting foreign investment with specific incentives.
In emerging EV markets, efforts are being made to establish and tighten fuel economy and emission standards, as well as facilitate electric grid development. Electrification of road transport in these markets should prioritize two/three-wheelers and urban buses due to their cost-competitiveness. Two- and three-wheeled vehicle sales continue to rise in emerging economies, and electric sales are expected to exceed 90% globally by 2040.
The availability of second-hand electric vehicles is also expected to boost EV adoption in emerging markets. As newer generations of EVs become available, earlier adopters will switch or upgrade, creating a supply of used vehicles. This is critical for mass-market adoption, especially if new electric cars remain expensive. The history of internal combustion engine (ICE) vehicles suggests that a similar pattern will emerge with EVs, as many emerging markets have been importing used ICE vehicles for decades.
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