Perhaps nothing illustrates the rise of electric vehicles over the past decade more than this statistic: In 2012, the total number of electric vehicles (EVs) sold in the entire world was 120,000. In 2021, more EVs than that were sold each week. In total, the International Energy Association reports, 6.6 million EVs were sold around the world in 2021, meaning almost 10% of all vehicle sales that year were electric, bringing the total number of EVs on the roads to about 16.5 million. Finally, in the first quarter of 2022, EV sales were up 75% from that same time period in 2021! Needless to say, EV sales are increasing globally.
The continued rise of EV adoption is being led by a number of factors, including:
- Government policies
- Subsidies and incentives
- Businesses electrifying their fleets
- A continually increasing number of new EV models
- Ambitious vehicle electrification targets in numerous countries
- Pledges by governments to phase out internal combustion engines (ICE)
The good news is that the future is looking bright for EVs. According to Cornell University’s SC Johnson School of Business, EV sales are expected to grow to 70% of total car sales by 2040 from just 4% in 2020.
However, there are still challenges ahead, most notably with procuring the raw materials needed for battery production.
Who are the top countries for EV adoption?
Who is leading the way with electric vehicle adoption? China.
In fact, China accounted for half of the worldwide growth of EV sales in 2021, and IEA writes that more EVs were purchased there in 2021 than in the entire rest of the world throughout 2020.
Coming in second is Norway, followed by Sweden, Germany and the United Kingdom rounding out the top five countries for EV adoption, according to the most recent version of the Electric Vehicle Country Readiness Index from Ernst & Young Global Ltd.
How is the United States doing with electric vehicle adoption?
Despite a strong vehicle manufacturing presence in the United States, and solid support from the current federal government, Ernst & Young has categorized the country as being “stuck in low gear” when it comes to EV adoption.
This is largely because of a comparative lack of demand. The index report says only 4% of new vehicle registrations in the US are for EVs, which puts the US in seventh place on their EV readiness index (the same position as the previous year).
What are the challenges to electric vehicle adoption?
There are two ways to look at what is hindering EV adoption:
- Consumer challenges
- Manufacturer challenges
Lack of demand, especially in places like the US, Canada, and India, still hamper EV adoption. This is partially due to the cost of EVs in these countries, but also with a relative lack of charging infrastructure.
While most charging takes place at home with residential EV chargers, public Level 2 and DC fast chargers are needed for drivers who lack access or need to charge during travel.
Supply chain issues and delivery delays also disrupt EV sales in some regions, making it harder for consumers to take receive their new EVs.
IEA states that cities that started adopting EVs early may also face electricity grid congestion as electricity infrastructure catches up to the new level of electricity demand. By 2030, EVs may account for 4% of total electricity demand worldwide. Smart charging options like Blink’s local load management will be key to solving this potential issue.
On the manufacturing side, global demand for EV batteries doubled in 2021, driven largely by China’s EV sales. With this increase in demand came an equally steep rise in the price of the metals used in the manufacturing of EV batteries – particularly lithium – which the IEA’s report says is a significant challenge to the EV industry.
In addition, there have been worldwide supply chain issues for battery materials, as Russia supplies 20% of the world’s high purity nickel.
What is being done to overcome the challenges to electric vehicle adoption?
Again, we can break this down into the consumer side and the manufacturer side.
Without a doubt, the biggest steps to helping consumers adopt EVs are government-backed programs like tax credits for EVs, funding for EV charging infrastructure expansion, enacting bans on internal combustion engines, and setting goals for EV adoption.
“Based on 2021 sales volumes,” the IEA’s report says, “about 25% of the global car market is subject to a 100% ZEV (zero emission vehicle) sales ambition or target, or ICE ban by 2035 according to government announcements.”
China continues to lead the way in terms of consumer solutions. The country aims to develop enough charging infrastructure to meet the needs of 20 million EVs by 2025, according to the IEA report. But the United States now has programs to support EVs and EV charging stations.
- The federal US government has expanded its electric vehicle tax credits for new and used EVs.
- As part of the Infrastructure Investment and Jobs Act (IIJA), $7.5 billion has been allocated towards EV charging infrastructure along America’s highways using the NEVI program.
- Businesses can receive the federal Alternative Fuel Infrastructure Tax Credit for installing EV charging infrastructure that meets certain criteria.
- State-level commercial EV infrastructure incentives are also available to businesses to help make up the shortfall of EV charging infrastructure in the US.
While many countries have opted to provide purchase incentives to consumers, China has opted to focus their government incentives towards the producers of electric vehicles, which has helped their EV manufacturing sector develop cheaper ways to make the vehicles.
China’s generally smaller vehicles, paired with these government incentives, have kept prices relatively low for consumers. In China, the government has set minimum production requirements, minimum technical battery performance standards, plant operating conditions and land development requirements for the country’s lithium-ion battery industry.
As part of the IIJA, the US federal government has pledged $3 billion for the development of domestic battery supply chains. Europe has also invested in domestic battery development to increase its own market share.
What about the rest of the world?
While China is leading the way, Europe is taking great strides, and the United States is making headway, the rest of the world is still taking tentative steps toward transportation electrification.
- In countries like Brazil, India and Indonesia, the IEA report says fewer than 0.5% of car sales are electric. And while those numbers are low, EV sales doubled in a number of regions in 2021, including India.
- The rest of Asia, outside of China, is expected to become more relevant in EV uptake after 2025, says the SC Johnson School of Business. Many countries in Southeast Asia like Vietnam, Indonesia, Malaysia and Thailand are taking steps to promote sales of EVs.
- In Africa, South Africa is leading the way on the continent as far as EV adoption, although it remains low. Countries like Rwanda, Kenya, Uganda and Egypt all have plans in place to increase EV production and usage.
- Chile is the market leader in Latin America, with Colombia and Costa Rica also providing government incentives and targets to help their EV markets expand.
- Canada, which faces many of the same struggles as the US when it comes to EVs has its own purchase incentives and funding plans in place to help the EV market grow.
- In a unique position due to its vast mining sector of critical EV battery minerals like lithium and nickel, Australia has invested heavily in its mining industry to help take advantage of its natural resources.
With China leading the way, Europe close behind, and the rest of the globe all doing what it can to keep pace, we will soon be living in a world where EVs are the default form of transportation. And with nearly 66,000 charging ports deployed across 27 countries, Blink is here to keep your vehicle charged. Click here to learn more about the Blink Network.