Prospects for electric vehicle deployment – Global EV Outlook 2023 – Analysis - IEA (2024)

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 by governments, companies and stakeholders about the future of EVs.

These scenario projections incorporate GDP and population assumptions from the International Monetary Fund (2022) and United Nations (2022), respectively.

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 of electrification 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 that countries that have signed on to the Conference of the Parties (COP26) 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 to support 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 achieve country ambitions and targets, and the policies and measures that have been legislated.

The Net Zero Emissions by 2050 Scenario (NZE Scenario) is a normative scenario that sets out a narrow but achievable pathway for the global energy sector to achieve 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, in line 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.

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.

Light-duty vehicles (LDVs), including passenger light-duty vehicles (PLDVs) and light commercial vehicles (LCVs), continue to make up the majority of electric vehicles (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 are projected to reach over 20million in 2025, doubling the number of sales in 2022, and to quadruple to 40million in 2030. The sales share of electric LDVs thus increases from 13% in 2022 to over 20% in 2025 and around 35% in 2030. The stock of electric LDVs reaches about 230million 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 240million in 2030, a 15% stock share. Of these, 230million are electric PLDVs, with only 6% being LCVs. Sales of electric LDVs reach almost 45million in 2030 in the APS, representing a sales share of 40%. These results reflect government electrification ambitions and net zero pledges, including the 2021 COP26 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.

Governments have made significant progress in electrifying public bus fleets. In 2022, there were more than 800000 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 1.4million in 2025 and 2.7million in 2030, at which point around one in ten buses will be electric. In the near term, electrification is expected to progress most rapidly within the publicly owned urban bus fleet, which is covered by government procurement regulations and, in some cases, government funding. For example, Canada is aiming to put 5000 electric public and school buses on the road by the end of 2025 via the CAD2.75billion Zero Emission Transit Fund.

In the APS, the electric bus fleet exceeds 3million in 2030, reaching a stock share of 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% zero-emission 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 are more difficult to electrify than other road segments, due in part to the size, weight and cost of the batteries needed to fully electrify this segment. However, progress is being made: around 320000 electric trucks were on the road in 2022. By 2030, the fleet of electric trucks reaches almost 3.5million in the STEPS, over 3% of the total truck fleet.

In the APS, the stock of electric trucks exceeds 4million 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 Zero-Emission Medium- and Heavy-Duty Vehicles, through which 27 countries have now pledged to reach 30% zero-emission medium- and heavy-duty vehicle2 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 aligned with 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 over three times that in the STEPS.

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 of ownership basis in many regions. In 2022, the electric two/three-wheeler fleet totalled over 50million, reaching a stock share of around 7%.

In the STEPS, the fleet of electric two/three-wheelers reaches 220million in 2030, or a quarter of the total two/three-wheeler fleet. In the APS, the stock grows to 280million, and almost 30% of all two/three-wheelers are electric. The electric sales 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.

China once again exceeded expectations for electric car sales in 2022, reaching a 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 grow due, 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 is on 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/three-wheeler 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 750000 (>95% of the global stock). In 2030, the sales 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 a sales share of nearly one-quarter in 2030 in both scenarios. Given that other countries have announced truck electrification targets, China’s lack of announced ambitions means that other countries achieve higher sales shares in the APS.

The sales share of EVs across all road transport modes (excluding two/three-wheelers) reaches around 60% in 2030 in both scenarios. Across all modes, the current 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.

Europe 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 the European 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 the European 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 UnitedKingdom’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 Europe3 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 by member 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% and around 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 governments4 who have signed the Global Memorandum of Understanding (MoU) on Zero-Emission Medium- and Heavy-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 share of over 60% in 2030 (for electric LDVs, buses and trucks), which is in line with the global 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 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 the additional 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.

With a supportive policy landscape, sales of electric cars and vans are expected to accelerate over the remainder of this decade in the UnitedStates, reaching the government 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 number of 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- and heavy-duty trucks, as well as for the installation of EV chargers. In the STEPS, the sales 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 share reaches slightly less than 30% (which is balanced by higher bus sales shares to achieve the overarching target) in 2030 in the APS. The electric bus sales share reaches 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/three-wheelers) reaches almost 50% in both the STEPS and APS. Thus, the implementation gap for EV sales shares in the United States shrank from around a 30 percentage points difference in 2030 last year to a negligible difference in this year’s Outlook.

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 to reach 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 for light 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 share reaches almost 30% and the electric truck sales share reaches over 10%. Japan’s Green Growth Strategy also sets targets for commercial vehicles, including that 100% of new commercial vehicle sales should be electrified or suitable for the use of decarbonised fuels by 2040. In the APS, sales of electric trucks amount to almost 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 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 for electric 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 and Maharashtra. 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 COP26 declaration to transition to 100% zero-emission LDV sales by 2040. While there is no national target for electric buses, four Indian states (containing around 15% of India’s population) aim to reach 100% electric bus sales by 2030 or earlier.

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 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 15percentage points.

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 and developing economies in particular, adoption of EVs can be hindered by a lack of fiscal incentives, limited availability of charging infrastructure and purchase price hurdles, 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 other than 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.

In most regions, the combined EV sales shares targeted by OEMs are either in step with or more ambitious than government pledges in the APS.

In addition to the new targets that OEMs have outlined for zero-emission and electric vehicle sales for LDVs (see Electrification plans by original equipment manufacturers), several announcements were made by heavy-duty OEMs in the past 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 have typically 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, or some combination of the three.

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

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 of GM’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.

China

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 FAW Group in 2022, and BYD ended production of conventional internal combustion engine (ICE) vehicles in early 2022 (see Electrification plans by original equipment manufacturers).

Europe

The electrification plans of OEMs anticipated the adoption of the new EU CO₂ standards for cars and vans, with the result that combined OEM ambitions roughly match 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 the European market, with targets reaching around 40% zero-emission vehicles sales in 2030. This exceeds what is projected in the STEPS and APS, despite the European Commission’s proposal for a 100% zero-emission target for city buses for 2030, and a 90% CO₂ reduction target for trucks for 2040.

United States

In the USLDV market, OEM ambitions match or exceed the government’s target of 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 UnitedStates 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.

Global EV battery demand increased by about 65% in 2022, reaching around 550GWh, about the same level as EV battery production. The lithium-ion automotive battery manufacturing capacity in 2022 was roughly 1.5TWh for the year, implying a utilisation rate of around 35% compared to about 43% in 2021.

Battery demand is set to increase significantly by 2030, reaching over 3TWh in the STEPS and about 3.5TWh in the APS. To meet that demand, more than 50gigafactories (each with 35GWh of annual production capacity) would be needed by 2030 in the STEPS in addition to today’s battery production capacity. This increases to close to 65 newgigafactories 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 6.8TWh, plenty sufficient to meet demand in both the STEPS and APS. In the NZE Scenario, battery demand reaches over 5.5TWh 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.

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 growth in EV sales in the United States, Europe and other markets.

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 have tended to live in single-family detached homes, where home charging is more convenient and more affordable than using public chargers. For example, around 80% of EV owners in the UnitedStates live in single-family homes. Assuming that access 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 17.5million home chargers in 2022. The stock of home chargers increases to 135million in 2030 in the STEPS and 145million in the APS.

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

By 2030, the total installed LDV charger capacity grows more than ninefold to 1.9TW in the STEPS, and to more than 2TW in the APS. For reference, the total installed capacity of solar PV worldwide in 2021 stood at less than 1TW. The capacity of public fast chargers grows at the fastest rate, increasing fifteen-fold by 2030 in the APS, despite the stock of public fast chargers increasing only around fivefold. 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.

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 to have access to residential chargers, and the majority (around 60%) of electricity delivered to electric cars and vans will come from these home chargers. Public chargers provide about 30% of the electricity needed to power the electric LDV fleet worldwide in 2030.

Public charging projections are based on the general trend of a decreasing ratio of charging points per EV over time as the market matures and the system is optimised, while maintaining reasonable charging capacity per EV.

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 public charger deployment to 2030, in part due to limited home charger access. In 2030, the stock of public LDV fast chargers reaches almost 5million in the APS from less than 1million 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 than fast chargers in both scenarios, increasing from about 1.8million in 2022 to 8million in 2030 in the STEPS and over 8.2million in the APS.

The total number of public chargers needed to support LDV electrification in China in 2030 is estimated to be around 7.5million, with a fairly even split between fast and slow chargers. In 2025, the stock of electric vehicle supply equipment already exceeds 4million 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 20million EVs by 2025. However, in both scenarios, the projected stock of electric cars and vans in China in 2025 is over 40million. In the IEA scenarios there is therefore a ratio of over nine 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 2.4million in 2030 in both the STEPS and APS, up from about half a million in 2022. In both scenarios, about 80% of the European public charging stock is in the European Union, or around 2million chargers in 2030.

In March 2023, the European Parliament and Council provisionally agreed to the proposed Alternative Fuels Infrastructure Regulation (AFIR), which sets requirements 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 electric LDVs reaches over 10% for BEVs and 5% for PHEVs, while the public charging capacity averages about 1.6kW per EV.

The UnitedKingdom has announced a strategy to deliver the charging infrastructure to support a 2030 phase-out of the sale of new petrol and diesel cars and vans, which includes the target of at least 300000 public chargers by 2030 and a minimum of 6000 fast chargers by 2035. In the APS, the stock of public chargers reaches around 280000 in 2030, of which about 80000 are fast chargers. This means that the share of fast chargers in the total public electric vehicle 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 the charging capacity is around 1.5kW per EV.

In the United States, the National Electric Vehicle Infrastructure Formula Program, established by the IIJA of 2021, will distribute up to USD5billion in funds from 2022-2026 to support the development of an EV charging network, with a target of 500000 chargers. In the APS, this level of public electric vehicle supply equipment deployment is required before the end of 2025, and the number of chargers reaches over 1.3million in 2030. In 2030, there are about 30electric LDVs per charging point.

Japan’s Green Growth Strategy sets a target of installing 150000 charging points by 2030, including 30000 fast chargers, with the goal of achieving the same level of convenience as refuelling gasoline vehicles. In the APS, the stock of LDV charging points reaches over 200000 in 2030, of which about 70000 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 25km along major highways. In March 2023, the Ministry of Heavy Industries also announced financial assistance for upstream electric vehicle supply equipment infrastructure. In the APS, the stock of public electric LDV charging points reaches 550000 in 2030, meaning there are fewer than 15 electric LDVs per charging point.

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 to charge at rates of less than 350-400kW, which would require close to a one-to-one ratio of depot chargers per electric HDV.

Battery electric trucks and buses with daily ranges that exceed what can be provided 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 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 short range routes (under 200km/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 – especially highway charging – will be required. High-voltage connections that may be required for HDV opportunity chargers have long lead times, and so planning is needed in the short-term to ensure adequate availability in the medium- to long-term.

In the STEPS, the number of bus depot chargers increases from about 800000 in 2022 to 2.5million in 2030, reaching a total capacity of around 250GW. 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 of opportunity bus chargers reaches around 5000, with an installed capacity of just over 1.2GW. In the APS in 2030, the stock of depot bus chargers is around 3million, reaching a capacity of about 315GW, while the number of opportunity bus chargers is only slightly more than 6500 (1.6GW of capacity).

To power the growing stock of electric trucks, the number of depot chargers increases from around 300000 today to 3.5million in 2030 in the STEPS and 4.2million in the APS. The installed capacity of truck depot chargers is about 310GW in the STEPS and 380GW in the APS in 2030. As with buses, the number of 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 13500 (6.5GW installed capacity), increasing to 25000 (13GW installed capacity) in the APS in 2030.

The global EV fleet consumed about 110TWh of electricity in 2022, which equates roughly to the current total electricity demand in the Netherlands. Almost a quarter of the total EV electricity consumption was for electric cars in China, and a fifth for electric buses in the same country. Electricity demand for EVs accounts for less than half a percent of current total final electricity consumption worldwide, and still less than one percent of China’s final electricity consumption.

Electricity demand for EVs is projected to reach over 950TWh in the STEPS and about 1150TWh in the APS in 2030. Notably, electricity demand in the APS is 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 high-average vehicle mileage markets such as the UnitedStates, but also to greater electrification in the truck and bus segments, which contribute incrementally to vehicle stock, but have a high electricity demand per vehicle. In addition, it is assumed that in countries with net zero pledges, a larger share of energy consumption in PHEVs is provided by electricity (as opposed to gasoline or diesel). This is particularly relevant for cars and vans, which account for about two-thirds 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 to demand for industrial applications, appliances or cooling and heating.

China remains the largest consumer of electricity for EVs in 2030, although its share of global EV electricity demand decreases significantly from about 55% in 2022 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.

The size of the EV fleet becomes an important factor for power systems in both scenarios, with implications for peak power demand, transmission and distribution capacity. Careful planning of electricity infrastructure, peak load management, and smart 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 both scenarios is via slow chargers (private and public).

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.

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 5million barrels per day (mb/d) of diesel and gasoline in the STEPS and almost 6mb/d in the APS, up from about 0.7mb/d in 2022. For reference, Australia consumed around 1mb/d of oil products across all sectors in 2021.

However, recent price volatility for critical minerals that are important inputs to battery 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.

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 have otherwise been travelled by ICE vehicles or hybrid electric vehicles (HEVs) (based on the stock shares of each). In the case of PHEVs, only the distance covered by electricity gets included. The stock average fuel consumption of gasoline and diesel 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 700000 barrels of oil per day.

This method of estimation assumes that EVs replace ICE or hybrid vehicles of the same 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 particular with 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 are considered. This definition excludes micromobility options such as electric-assisted 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 same time, 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 that is being displaced.

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 260kb/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 10kb/d (10%). However, if it was assumed that they displaced car trips, then oil use avoided by two-wheelers in China would be more than 1mb/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.

Taxes on petroleum-based road fuels can be a significant source of income for governments,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. Additional tax revenue from electricity will not be sufficient to fully compensate for this reduction, 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 USD11billion in gasoline and diesel tax revenues globally. At the same time, the use of EVs generated around USD2billion in electricity tax revenue, meaning there was a net loss of around USD9billion. 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 the highest taxes on gasoline and diesel; for example, the gasoline tax rate in Germany 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-a-half times by 2025 in both STEPS and APS. By 2030, this totals about USD60billion in 2030 in the STEPS, and about USD70billion in the APS. Europe is most affected, with fuel tax revenue to decline by around USD50billion in 2030 in the APS. Possible tax losses in countries outside of Europe, China and the United States increase to more than USD20billion, of which Korea represents about one-third. Impacts in the United States appear limited, with a total net loss of tax revenue of less than half a billion USD in 2030. However, this value is based on 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 than federal rate.

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 in fossil fuel use, for example through a fuel tax escalator. However, this type of measure can be politically unpopular and create equity issues, especially in times of relatively high oil prices.

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 new vehicle 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 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 associated societal costs. In addition, distance-based charges, such as those that vary by time, place and vehicle type, could also reduce traffic congestion, noise and road infrastructure damage.

In 2022, EVs enabled a net reduction of about 80Mt of GHG emissions, on a well-to-wheels basis. The biggest savings were achieved from EVs in China, where almost 30% of global emissions reductions come from the electrification of passenger cars in China. As the EV fleet continues to grow, it will contribute to further 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 from 2022 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 700Mt CO₂-equivalent in 2030. The production of electricity to fuel the EV fleet in 2030 in the STEPS results in 290Mt CO₂-eq emissions, but this is more than offset by the avoidance of 980Mt CO₂-eq that would have been emitted from an 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 770Mt CO₂-eq.

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