Opinion: IEA chief: Electric cars are transforming the car industry. This is good news for the climate

But the current crisis could be a turning point for clean energy. The transition to a cleaner and safer energy system involves tackling emissions from the main sectors that emit greenhouse gases: electricity, industry, transport and buildings. Transport is the most dependent on fossil fuels of any sector, and electric vehicles are essential to reducing emissions and harmful urban air pollution, and reducing countries’ reliance on oil imports.
Given the latest trends and government and business priorities around the world, we see tremendous growth potential for electric cars in the coming years. By 2030, more than one in two cars sold in the United States, the European Union and China could be electric, according to new analysis to appear in the International Energy Agency’s flagship World Energy Outlook report next month. It is an extraordinary transformation that we are seeing in the world’s three largest car markets. Globally, electric vehicle market share could rise to 40% from less than 10% last year.

But there’s still a lot of work to be done to make electric vehicles fulfill their potential, and governments can help. Here’s where they can start:

Sales of electric cars are already growing strongly in Europe and China. The US has lagged behind, but that’s about to change thanks to the recent Inflation Reduction Act, which I believe is the most important energy and climate action any country has taken since the 2015 Paris Agreement. For EVs, the minutes sound decisive. measures to promote manufacturing, promote sales and expand charging stations and other infrastructure.
In Europe, the Fit for 55 package will help to further accelerate sales of electric vehicles there by imposing strict emission standards, phasing out combustion engine cars and vans by 2035 and helping to make charging stations more accessible to the public.

Beyond China, the EU and the US, EV growth has been much slower. Automakers need to strengthen their supply chains and ramp up production quickly, and governments need to support this by providing manufacturing incentives and cutting red tape.

Governments should also help companies ensure they have sufficient and sustainable supplies of minerals such as lithium, which are needed to make EV batteries. Countries must work together to secure critical mineral supplies, as they have done for decades with oil security.

Providing tax credits to consumers

In most markets, the upfront purchase price of electric vehicles is higher than that of a gasoline car, but the Inflation Reduction Act in the US includes measures to combat this, such as a credit of up to $7,500 per vehicle. Similar measures are already in place in European countries, and China’s tax exemption for electric vehicles was recently extended until the end of next year.
The cheaper running costs of electric cars mean that owners can recoup the extra money they pay to buy their vehicles within a few years. Despite current high electricity prices, electric vehicles remain the most cost-effective option over time, according to new IEA analysis.

Expanding electric vehicle sales in economies beyond China, Europe and the United States will require more than automakers’ efforts to expand electric offerings outside major markets. Governments will need to push policy reforms and provide financial support to make electric vehicles the most affordable option. They will also need to build charging infrastructure to ensure there are enough chargers for the growing number of electric vehicles.

Countries around the world are competing fiercely to try to be leaders in this emerging new energy economy. And this competition is necessary; this is what has caused the dramatic decline in solar, wind and EV battery costs in recent years.

Today’s energy crisis creates extraordinary difficulties, especially for the coming winter. But it has also opened the door wider for the world’s new energy economy to further replace the old. The amazing growth in EVs has only just begun, and with government support and continued technological advances, it could continue much faster.