Global electric vehicle (EV) sales increased more than 50 per cent from 2021 to 2022, making up a total of 14 per cent of all new cars sold in the world.
China accounted for most of the global sales of EVs (which includes both battery electric and plug-in hybrids) and has already exceeded its 2025 target. In Europe, EV sales increased by over 15 per cent, meaning that about 20 per cent of cars sold were electric.
In Australia, EVs accounted for about 3.8 per cent of all new vehicle sales.
These figures are from the International Energy Agency's (IEA) annual report on the electric mobility industry, the Global EV Outlook 2023, published on Wednesday night.
The snapshot of global uptake comes a week after the Australian government released its strategy for driving EV sales and provides a handy opportunity to compare Australia's progress with the rest of the world.
Although domestic sales are accelerating, the report paints a picture of Australia being overtaken as other countries race ahead.
When did Australia's EV uptake fall behind?
In the past three years, the gap in the EV uptake between Australia and countries like the UK, US, France and Germany has dramatically widened.
In 2019, EV sales in those countries was about 3 per cent of the total of new car sales, while in Australia it was about 1 per cent.
The following year in Germany, that figure jumped to 14 per cent. In France and the UK it increased to 11 per cent.
The sales increase correlated with the introduction of purchase incentives, sometimes rolled in with COVID-19 stimulus measures.
Australia, meanwhile, was one of only two major markets where EV sales dropped more than overall car sales.
"It just wasn't really on the national agenda for a long time," said Hussein Dia, a transport expert at Swinburne University.
"People just accepted that Australia is different, that we will still have time to do things, and this is how we have fallen behind."
But with the right policy settings, it was possible for Australia to narrow the gap, said Behyad Jafari, CEO of the EV Council.
"We can very quickly catch up to where the rest of the world is," he said.
How much have global EV sales increased?
Car markets are seeing "exponential" growth in EV sales, according to the IEA report.
In the past decade, global EV sales have increase more than 100-fold, with most of that growth coming in the past five years.
From 2017 to 2022, EV sales jumped from around 1 million to more than 10 million.
Three markets — China, Europe and the US — accounted for about 95 per cent of global sales in 2022.
What's driving China's EV boom?
The scale of the boom in EV sales is being largely driven by China, which now accounts for more than half of all EVs on the road worldwide.
In 2022, Chinese car maker BYD overtook Tesla in sales.
Chinese car makers accounted for 45 per cent of global sales.
So, what's driving EV sales in China? A mixture of government mandates and purchase incentives, combined with the very low price tags of EVs.
In 2021, the average battery EV price outside of China was just under $US50,000 ($75,500).
In China, it was $US27,000 ($40,800), thanks to smaller vehicle sizes, lower production costs, and the fact that China makes the batteries that go into EVs.
What's holding Australia back?
The number of EVs on Australian roads almost doubled in 2022, growing from 44,000 at the beginning of the year to more than 83,000.
But demand and supply issues are holding Australia back, experts say.
On the demand side, there's a lack of federal purchase incentives, similar to the rebates offered by some states and territories.
"I think the incentives are nowhere near where they need to be if we are serious about encouraging the uptake," Professor Dia said.
"For a fraction of the cost of buying or building a submarine, you can actually provide direct incentives to people who need it."
There's also strong cultural opposition, focusing on perceived issues of range and towing power. The 2019 election battle over EV policy, for instance, saw former prime minister Scott Morrison claim that EVs could not tow a boat and would "end the weekend".
Added to that was the political resistance, Professor Dia said.
"We have a very strong fossil fuel and internal combustion engine lobby in Australia."
Mr Jafari from the EV Council agreed, saying that "certain car companies are pushing for Australia to fall behind".
Despite these issues, demand for EVs far outstrips supply in Australia.
On the supply side, the main issue is a lack of fuel-efficiency standards that would require car makers to meet certain emissions limits for their entire fleet or else face penalties.
As a result, car makers are supplying EVs to markets that do have these standards, in order to avoid penalties there.
The government's EV strategy, released last week, stated that Australia would introduce these standards after more consultation, with more detail to be released by the end of the year.
Strong standards are a missing piece of the puzzle, Mr Jafari said.
"Some 12 months ago, New Zealand introduced strong fuel efficiency standards.
"They went from 4 per cent to 20 per cent [of EV share of new car sales]."
The government has also set a fleet strategy for the public service to be net zero by 2030, and have 75 per cent of its new cars be low emissions by 2025.
Last year, it introduced a discount on the import tax for some EVs, as well as exemptions to the fringe benefits tax.
And there are various incentives at the state level, including fleet incentives for councils and business in NSW, a $3,000 subsidy in Victoria, and interest-free loans for EVs in the ACT.
A $6,000 rebate in Queensland was announced last week.
Professor Dia said these were a good start, but more was needed, including making vehicles with high emissions more expensive.
The model for this is the "feebate" system introduced in New Zealand and France, which uses the revenue from a levy on high-emission vehicles to provide rebates for the purchase of EVs and offset their higher prices.
"[EV policy] needs to have the carrot and the stick," he said.
"These can be revisited every few years to monitor what's happening."
What are the consequences of falling behind?
It has broadly two consequences, Professor Dia said.
First, slow EV uptake now means Australia will have more work to do later to reach its 2030 and 2050 decarbonisation targets.
Second, it potentially cements Australia's global standing as a "dumping ground" for high-polluting vehicles. This oversupply of cheap polluting vehicles will make it harder to increase EV uptake.
About 42 per cent of the world's car market has said by 2035 it will ban internal combustion engines altogether, Mr Jafari said.
In recent weeks, the US has proposed strict new emissions limits that would require two-thirds of vehicles sold in the US to be electric by 2032.
Earlier this year, the EU announced plans to effectively ban the sale of petrol and diesel cars by 2035 (it later introduced some exemptions).
"We haven't missed the boat, [but] I think we need to impress on the government that sense of urgency," Professor Dia said.
"It's not only important, it's also urgent because it's going to be really difficult the more we delay it."
What's next for EV sales?
The IEA predicts EV sales will increase 35 per cent from 2022 to 2023, which would mean EVs account for 18 per cent of total car sales.
Based on governments' stated policies, the IEA predicted EVs would account for 35 per cent of global car sales by 2030, up from the prediction of 25 per cent in the 2022 outlook.
Global oil demand from road transport would peak around 2025, the IEA predicted.
Releasing the 2023 outlook, IEA executive director Fatih Birol said the "explosive" growth of EVs will avoid the need for at least 5 million barrels a day of oil by 2030.
"They are bringing about a historic transformation of the car manufacturing industry worldwide," he said.
"The internal combustion engine has gone unrivalled for over a century, but electric vehicles are changing the status quo."
