In recent years, the world has witnessed an electrifying shift toward electric vehicles (EVs). In 2018, EVs accounted for only 2% of all cars sold. By 2023, only 5 years later, this figure burgeoned to 18% of all cars sold worldwide. Within the United States, policies such as President Biden’s Inflation Reduction Act (IRA) have been a strong driver in increased sales. This pivotal transition demonstrates a shift in consumer preferences accompanied by government policy aimed at supporting the energy transition and EV adoption.
Global Momentum
According to the International Energy Agency, the world continues to increase its share of EVs sold. China, Europe, and the US lead the pack in putting EVs on the road.
Countries such as Thailand and Vietnam have also become strong players in the market. In 2023, EVs made up 10% of all cars sold in Thailand and 15% for Vietnam. This shift highlights a significant worldwide desire to promote sustainable transportation solutions.
Governments’ Role in the EV Market
This year’s global estimates are looking at a continued growth in EV sales–about 1 in 5 cars sold in 2024 will be electric vehicles. Governments continue to set ambitious climate-friendly goals that will continue to support the EV market.
Climate pledges worldwide account for some of the EV-friendly policies that have helped to increase sales of electric cars. Within the US specifically, the IRA is one of several policies that has served as a catalyst for the energy transition that has spanned from public transportation vehicles to extended tax credits for EV customers.
The Chinese government’s ambitious carbon emissions reduction goals have propelled this accelerated adoption of EVs. In the first quarter of 2023, China EV sales rose 28% , while the price of these cars became more affordable to consumers. Like in the United States, China has used its coffers to strengthen its charging infrastructure and to provide incentives to consumers.
Europe’s EV market penetration follows behind China’s. In 2023, 14.6% of all cars sold were EVs . Emission standards, increasingly advanced charging networks, and subsidies have fueled the EV market in the continent.
The EV Market in the US
In 2023, 7.6% of cars sold in the US were EVs , and EV sales are expected to reach the 10% mark in 2024. California led the pack where the EV market share was 25.98% in the third quarter of 2023.
Tesla, the company with the largest market capitalization value , continued to lead in car sales with its Model Y leading the pack in 2023. By the start of 2024, the company still had a commanding hold of the market despite its 9% year-on-year decrease in car sales in the first quarter. Despite this decrease, the automaker should continue to lead in the US market as the Biden administration uses government tools to bar Chinese automakers from exporting to the US.
The EV-friendly IRA passed under President Biden has also served as a catalyst for the market. Subsidies for consumers were extended to 2032; $1.2 billion was made available to electrify public transportation systems across the country; $19.25 billion will be spent on charging infrastructure; not to mention the various tax incentives some states are offering to increase EV adoption.
Global Outlook Moving Forward
The global EV market remains strong and continues to grow. This year’s growth suggests that about 1 in 5 cars sold in 2024 will be electric vehicles, continuing to demonstrate a positive trend in EV adoption.
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