China continues to lead the global electric vehicle (EV) charge, holding its place as the top nation prepared for an electric future. Key drivers of this leadership include the overwhelming investment in battery manufacturing (74% of global investment in 2022), soaring consumer demand (58% of Chinese consumers planning to buy an EV next), and robust charging infrastructure. China remains the world’s largest EV market by volume.
Norway, an early adopter of EVs, maintains its position as the second most EV-ready nation. The country boasts an impressive 81% EV adoption rate, fueled by generous incentives and high GDP per capita, making EVs affordable for the masses. Moreover, 83% of vehicles launched in Norway between 2022 and 2027 will be electric.
The United States has catapulted itself from the seventh spot to third place. This rapid ascent is attributed to innovations in car models, significant investments in battery manufacturing, and government regulations aimed at stimulating EV demand. New federal tax credits, like the Inflation Reduction Act, have incentivized consumers to opt for EVs, resulting in an 11% share of global EV production.
While global demand for EVs continues to rise due to factors such as performance improvements, expanding charging infrastructure, and reduced “range anxiety,” challenges persist. Norway leads with an 81% EV uptake, followed by Sweden (53%) and the Netherlands (35%). However, China and the US lead in absolute EV sales, with approximately 8.3 and 1.5 million units projected in 2023, respectively. Despite this growth, EV sales have outpaced immediate consumer demand in major markets.
The United Kingdom holds the fifth position but faces challenges, including reduced investments from battery manufacturers and OEMs due to more attractive incentives in the US and China. Nevertheless, the UK’s commitment to phasing out internal combustion engines by 2030 is expected to boost demand for electric vehicles.
Germany has fallen from fourth to eighth place due to decreased EV subsidies and expectations of declining demand, especially from businesses. The country also needs to improve its EV charging infrastructure, with a ratio of 26 EVs per charging station.
Italy lags behind its European neighbors at 12th place, primarily due to insufficient charging infrastructure and an energy ecosystem needing enhancements. Japan, in 15th place, has seen a sharp drop in EV demand, favoring hybrids over battery electric vehicles (BEVs) and lacking investments from major local OEMs.
The race to electrify the world’s vehicles is in full swing, with China and Norway leading the pack, the US gaining momentum, and each nation facing unique challenges on the road to an electric future.
Source: EY
