Minerals shortage could puncture global EV sales growth, IEA warns

Electric car sales hit a sales record last year and interest in the plug-in segment has remained strong so far in 2022, but future growth will need more efforts to diversify battery manufacturing and critical mineral supplies to reduce the logistical and price risks, the International Energy Agency said on Monday.

According to the agency, the sales of electric cars (including fully electric and plug-in hybrids) doubled in 2021 to a new record of 6.6 million, with more now sold each week than in the whole of 2012.

Data from the latest edition of the annual Global Electric Vehicle Outlook revealed that despite strains along global supply chains, sales kept rising strongly into 2022, with 2 million electric cars sold worldwide in the first quarter, up by three-quarters from the same period a year earlier.

The number of electric cars on the world’s roads by the end of 2021 was about 16.5 million, triple the amount in 2018, the report said.

One of the champions of EVs was China, where electric car sales nearly tripled in 2021 to 3.3 million, accounting for about half of the global total, the IEA said.

Since Chinese electric cars are typically smaller than in other markets, this has significantly reduced the price gap with traditional cars, combined with lower manufacturing costs.

The median price of an electric car in China was only 10 percent more than that of conventional offerings, compared with 45 percent to 50 percent on average in other major markets, the IEA said.

By contrast, electric car sales were lagging in most emerging and developing economies where only a few models are often available and at prices that are unaffordable for mass-market consumers, the IEA observed.

Sales, however, grew strongly in Europe (increasing by 65 percent to 2.3 million) and the United States (more than doubling to 630 000).

“Few areas of the new global energy economy are as dynamic as electric vehicles. The success of the sector in setting new sales records is extremely encouraging, but there is no room for complacency,” IEA Executive Director Fatih Birol said in a statement.

“Policy makers, industry executives and investors need to be highly vigilant and resourceful in order to reduce the risks of supply disruptions and ensure sustainable supplies of critical minerals. Under its new Ministerial mandate, the IEA is working with governments around the world on how to strategically manage resources of critical minerals that are needed for electric vehicles and other key clean energy technologies,” he added.