IEA Predicts Drop in Smaller EV Prices as EV Sales Climb
IEA Predicts Drop in Smaller EV Prices as EV Sales Climb
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IEA Predicts Drop in Smaller EV Prices as EV Sales Climb

The International Energy Agency (IEA) predicts that the global electric vehicle (EV) market will grow significantly this year, with nearly one in five cars sold globally being electric. This growth is driving down prices for smaller EV models, which are expected to compete with combustion engine cars in North America and Europe by the mid-2020s. The IEA credits the US Inflation Reduction Act for supporting the green industry and subsidizing consumers’ EV purchases.

China Leads the Way in EV Sales

China is leading the world in the electric vehicle industry, accounting for half of the EVs on the road worldwide, including battery-electric cars and plug-in hybrids. The country saw 60 percent of EV sales last year, according to the IEA’s annual outlook on EVs.

Smaller EV Prices Set to Drop

The IEA’s energy technology policy head, Timar Guell, noted that prices for some smaller EV models in China are edging lower towards those of their combustion engine equivalents. The IEA expects smaller EV prices to match those of combustion engine cars in North America and Europe by the mid-2020s.

The Surge in Global EV Sales

According to the IEA’s annual outlook on EVs, electric car sales globally are expected to surge 35 percent this year to 14 million, comprising 18 percent of the passenger car market, up from just 4 percent in 2020. The IEA also expects purchasing parity for larger EVs like SUVs and pick-ups to come later, probably in the 2030s.

Conclusion

As the global demand for electric vehicles continues to grow, the IEA predicts that smaller EV prices will become increasingly competitive, leading to a surge in EV sales worldwide. This trend is good news for the environment and consumers, who will benefit from lower prices and a wider selection of EV models.

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