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 More than one in five cars sold worldwide this year is expected to be electric, with surging demand projected over the next decade set to remake the global auto industry and significantly reduce oil consumption for road transport, the new edition of the IEA’s (International Energy Agency) annual Global Electric Vehicle Outlook said on Tuesday.

The Outlook finds global electric car sales are set to remain robust in 2024, reaching around 17 million by the end of the year. In the first quarter, sales grew by about 25 per cent compared with the same period in 2023 -- similar to the growth rate seen in the same period a year earlier, but from a larger base.

The number of electric cars sold globally in the first three months of this year is roughly equivalent to the number sold in all of 2020.

In 2024, electric car sales in China are projected to leap to about 10 million, accounting for about 45 per cent of all car sales in the country.

In the US, roughly one in nine cars sold are projected to be electric -- while in Europe, despite a generally weak outlook for passenger car sales and the phase-out of subsidies in some countries, electric cars are still set to represent about one in four cars sold.

This growth builds on a record-breaking 2023. Last year, global electric car sales soared by 35 per cent to almost 14 million. While demand remained largely concentrated in China, Europe and the US, growth also picked up in some emerging markets such as Vietnam and Thailand, where electric cars accounted for 15 per cent and 10 per cent, respectively, of all cars sold.

Substantial investment in the electric vehicle (EV) supply chain, ongoing policy support, and declines in the price of EVs and their batteries are expected to produce even more significant changes in the years to come.

The Outlook finds that under the policy settings, every other car sold globally is set to be electric by 2035.

Meanwhile, if countries announced energy and climate pledges are met in full and on time, two in three cars sold would be electric by 2035.

In this scenario, the rapid uptake of electric vehicles -- from cars to vans, trucks, buses, and two- and three-wheelers -- avoids the need for around 12 million barrels of oil per day, on a par with current demand from road transport in China and Europe combined.

“The continued momentum behind electric cars is clear in our data, although it is stronger in some markets than others,” said IEA Executive Director Fatih Birol.

“Rather than tapering off, the global EV revolution appears to be gearing up for a new phase of growth. The wave of investment in battery manufacturing suggests the EV supply chain is advancing to meet automakers’ ambitious plans for expansion. As a result, the share of EVs on the roads is expected to continue to climb rapidly. Based on today’s policy settings alone, almost one in three cars on the roads in China by 2030 is set to be electric, and almost one in five in both the US and European Union. This shift will have major ramifications for both the auto industry and the energy sector.”

The report finds that manufacturers have taken major steps to deliver on the strengthening EV ambitions of governments, including by making significant financial commitments.

Thanks to high levels of investment over the past five years, the world’s capacity to produce batteries for EVs is well positioned to keep up with demand, even as it rises sharply over the next decade.

The pace of the transition to EVs may not be consistent and will hinge on affordability, the report emphasises.

In China, more than 60 per cent of electric cars sold in 2023 were already less expensive to buy than their conventional equivalents.

However, in Europe and the US, the purchase prices for cars with internal combustion engines remained cheaper on average, though intensifying market competition and improving battery technologies are expected to reduce prices in the coming years.

Even where upfront prices are high, the lower operating costs of EVs mean the initial investment pays back over time.