As we approach mid-2019 (how? when?), it only seems appropriate to check in on the state of the global electric vehicle sector.
Luckily for Electric Avenue readers, there is a wealth of new data to point to, including the International Energy Agency’s latest Global EV Outlook. Below we look at six stats related to current and future EV sales, investment, energy consumption and emissions.
1) Global EV sales increase by 63 percent
Electric mobility is accelerating at a rapid pace. According to the International Energy Agency’s recently released Global EV Outlook, worldwide EV sales exceeded 5.1 million in 2018, marking an increase of 63 percent (or 2 million units) from the previous year.
China is by far the world’s largest electric car market (as this column recently covered in a multipart series), followed by Europe and the United States. Around 45 percent of electric cars on the road in 2018 were located in China — for a total of 2.3 million — compared to 39 percent in 2017. Europe accounted for 24 percent of the global fleet last year, while the United States represented 22 percent.
Norway remained the global leader in terms of EV market share, with electric cars making up 46 percent of new car sales in 2018. That’s more than double the 17 percent of sales in Iceland, the second-ranked country in terms of market share.
According to the IEA, the number of electric two- and three-wheelers on the road exceeded 300 million by the end of 2018. The vast majority of these vehicles are located in China. The Asian economic powerhouse is also leading the globe on electric bus deployments. There were more than 460,000 plug-in buses around the world at the end of last year, up nearly 100,000 units over 2017. China makes up around 87 percent of the electric bus total.
In the freight transport sector, EVs are predominantly deployed as light-commercial vehicles. Last year their numbers rose to 250,000, up 80,000 units from 2017. Medium-duty truck sales totaled between 1,000 and 2,000 units last year, according to the IEA. Most of those sales were in (no surprise) China.
2) BNEF: EVs to make up 57 percent of sales by 2040
Passenger EV sales are forecast to surpass conventional combustion engine vehicle sales by 2040, according to new research by Bloomberg New Energy Finance. By that year, electric cars could make up 57 percent of all passenger car sales worldwide, BNEF’s 2019 Electric Vehicle Outlook report found. That marks a 2 percentage point increase from BNEF's 2040 projection released last year.
In more specific terms, BNEF forecasts annual passenger EV sales will increase from just over 2 million in 2018 to 10 million in 2025, 28 million in 2030 and 58 million in 2040.
BNEF’s EV projections tend to be more bullish than other research organizations. The IEA, for instance, anticipates annual EV sales will increase at a slower pace, unless additional policies are put in place.
While technology improvements and price reductions are driving growth across the EV industry, policy will continue to play a central role, the IEA finds. In the agency’s New Policies Scenario — which incorporates policies that governments around the world have already put in place, and the likely effects of announced policies, including commitments made for the Paris Agreement — global EV sales (excluding two- and three-wheelers) reach 23 million per year by 2030. That’s 5 million fewer units per year compared to BNEF’s analysis.
Under the IEA’s EV30@30 Scenario, which assumes additional policies are put in place to accelerate EV adoption, the agency’s projections are higher. In this case, EV sales nearly double to reach 43 million by 2030, coming in well above BNEF’s projection.
3) Total passenger EVs in 2040: 280 million to 500 million?
Based on BNEF’s annual EV growth projections, the firm expects there to be a total of 500 million passenger EVs on the road by 2040. “The internal combustion passenger vehicle fleet continues to grow until 2030 before declining,” the report states.
But, again, this falls on the more optimistic side of the ledger.
Wood Mackenzie, for instance, forecasts there will be 280 million passenger EVs on the road by 2040.
4) Global EV investment reaches nearly $350 billion
Earlier this year, Reuters published an analysis of 29 global automakers that found these companies are spending at least $300 billion on electric vehicles, with 45 percent of the total directed at the Chinese market (as previously covered in this column). That’s a substantial investment number, but it may already be out of date.
According to data from the research firm Atlas Public Policy, the total investment figure is now closer to $350 billion — $347 billion to be specific. In addition to tracking newer light-duty EV investments, the Atlas Public Policy EV Hub database added investments in EV charging infrastructure as well as electric buses. Atlas also recorded investments from 36 companies versus the 29 companies analyzed by Reuters.
This new data confirms China’s dominance in the market, with almost 40 percent of all investment. As for where the money is coming from, German and Chinese companies are the leading EV investors, according to Atlas, with almost $200 billion committed to transportation electrification.
Global EV Investment
Source: Atlas Public Policy
In contrast, U.S. companies have only committed $34 billion to EV development to date, and the U.S. is poised to receive only $35 billion — or roughly 10 percent of the committed worldwide investment.
5) EVs consume 58 terawatt-hours of electricity
According to the IEA’s Global EV Outlook, the worldwide EV fleet consumed an estimated 58 terawatt-hours of electricity in 2018, which is roughly equivalent to the total electricity demand of Switzerland in 2017.
Light-duty vehicles saw the strongest growth in energy demand among all transport modes last year, but two-wheelers continued to account for the largest share — 55 percent — of EV energy demand. China accounted for 80 percent of global electricity demand for EVs in 2018.
These numbers will increase dramatically as more EVs hit the road. Electricity demand from EVs in the IEA’s New Policies Scenario (outlined above) is projected to reach almost 640 terawatt-hours in 2030, and projected to reach 1,110 terawatt-hours in the more ambitious EV30@30 Scenario. By that time, light-duty vehicles will become the largest electricity consumer among all vehicle segments.
6) EV carbon emissions 43% lower than diesel vehicles (maybe)
Looking at EV energy consumption raises an important question about how clean these vehicles actually are. And the unsatisfying answer is: It depends.
It depends on how the electricity EVs use is generated, which varies state-by-state and country-by-country. When considering a car’s life cycle emissions, it also depends on where and how the car and its components are made.
Carbon Brief recently conducted an in-depth analysis of EV emissions in Europe and found that these vehicles are responsible for considerably lower emissions over their lifetime than internal combustion engine vehicles across Europe as a whole.
One study cited by Carbon Brief, by Germany’s Fraunhofer Institute for Systems and Innovation Research ISI, found that EV emissions are up to 43 percent lower than diesel vehicle emissions.
Similarly, IEA calculates the global EV stock in 2018 emitted about 38 million tonnes of carbon-dioxide equivalent on a well-to-wheel basis, which compares to the 78 million tonnes of carbon-dioxide equivalent that a comparably sized internal combustion engine fleet would have emitted. That means the current global EV fleet produced a net emissions savings of 40 million tonnes of carbon-dioxide equivalent in 2018.
On the whole, EVs are cleaner than their gasoline and diesel counterparts. But, again, the emissions associated with EVs vary by region.
According to Carbon Brief, batteries are one of the biggest variables. Battery size and manufacturing location are particularly important. For instance, a 30-kilowatt-hour Nissan Leaf battery made in Asia would have a lower emissions impact than a 75-kilowatt-hour Tesla Model 3 battery made in Asia, simply because it’s smaller.
Around 50 percent of battery life cycle emissions come from the electricity used in the battery manufacturing and assembly process. So if Tesla Model 3 batteries were made in Asia where the grid is dirtier, its cars would have higher life cycle greenhouse gas emissions than the best-rated conventional car (Toyota Prius C), but would still be better for the climate than the average vehicle.
But because Tesla’s batteries are actually made in Nevada, where the electricity grid is cleaner, the emissions profile of the Model 3 is much lower.
“Taking manufacturing conditions into account, a Model 3 with a 75 kWh battery from the Nevada Gigafactory results in notably smaller emissions — and has a life cycle climate impact similar to the estimate for the Nissan Leaf,” according to Carbon Brief.
The Model 3 still has lifetime emissions similar to the most efficient conventional cars in Germany and the U.S. But in all cases, the EV is a substantial improvement over the average conventional vehicle.
Whether it's the battery production or where the car plugs in, the climate impact of EVs ultimately rests on the carbon intensity of electricity generation. “In the future, the emissions reduction potential over the life cycle of EVs can rise further the faster electricity generation is decarbonized,” the IEA report states.