Nearly 1 In 5 New Cars In The World Will Be Electric By End Of 2023: IEA Report

Electric vehicle sales will jump 35% year-on-year to 14 million by the end of 2023, thanks to national policies and incentives, said a new report by the International Energy Agency (IEA).

What Happened: Electric cars accounted for 14% of new cars sold in 2022 and would account for 18% by the end of 2023, according to a new report published by the intergovernmental organization on Wednesday. The rise in popularity would be positively abetted by the rise in oil prices, the report added.

The IEA now sees electric sales accounting for 35% of new car sales by 2030 as compared to the previous outlook of 25%.

China will continue to be the largest market accounting for 40% of total sales while the U.S. doubles its market share to 20%. The amount of oil displaced by electric vehicles would exceed 5 million barrels per day by 2030, the report added.

“The internal combustion engine has gone unrivaled for over a century, but electric vehicles are changing the status quo,” said IEA Executive Director Fatih Birol.

Why It Matters: The U.S. is now the third largest market for EVs as per the report. In 2022, EV sales surged 55% and touched a sales share of 8%.

In the U.S., Elon Musk-led Tesla Inc TSLA is the leader in electric vehicles by production and deliveries. The company also saw one of its vehicles crack the top 10 bestselling vehicles of the entire sector last year.

Earlier this month, the Joe Biden administration built on its existing vision for clean transportation and proposed new emission standards aimed at making EVs account for over two-thirds of all light-duty vehicle sales by 2032.

The IEA predicts that the Inflation Reduction Act, combined with the adoption of California's Advanced Clean Cars II rule by a number of states, could deliver a 50% market share for electric cars in 2030, in line with the national target.

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