The International Energy Agency (IEA), a Paris-based inter-governmental organization, recently released the latest edition of its Global EV Outlook report. The report highlights that, despite the deleterious impacts of the pandemic on the automotive sector, electric car sales broke all records in 2020 — up 40% from 2019. Approximately three million new electric vehicles (EVs) were registered, bringing the total number of EVs on the world's roads to more than ten million. Europe made significant strides in EV adoption, overtaking China as the world's largest EV market.

Consumer spending on electric cars increased to a record USD $120 billion in 2020 — an increase of 50% from 2019. Consumers can choose from a more extensive range of EV models, including a wide array of new SUV models. In 2020, there were 370 EV models available, with the most significant increase in models based in Europe. Eighteen of the top 20 global vehicle manufacturers have announced plans to scale up production of EVs and expand their range of models.

SUVs now account for half of all EV models in all markets. Their higher profit margins help explain their proliferation. The report notes that electrification of high fuel consumption SUVs provides an excellent opportunity to reduce emissions. 

Europe became the “engine” of EV markets in 2020. Although the automotive market in Europe decreased by 22%, electric car registrations more than doubled. The IEA credits two European policy measures for the surge in electric car registrations: (1) the European Union's CO2 emission standards target, which limits average CO2 emissions for new cars; and (2) increased subsidy schemes for EVs as part of stimulus packages to counter the effects of the pandemic. Notably, in France, Germany, and Italy, purchase incentives led to an average 55% increase in EV sales. 

As well, demand for batteries in Europe exceeded domestic production capacity in 2020. Poland and Hungary are currently Europe's largest battery producers, but more battery plants have been announced or are under construction with support from the European Investment Bank. Notwithstanding battery demand growth in Europe, China still accounts for the greatest battery demand at almost 80 GWh. Production of automotive lithium-ion batteries increased by 33% in 2020. Nickel-manganese-cobalt batteries account for 71% of global sales, with nickel-cobalt-aluminum batteries making up the other 29%. Despite the increase in demand, the cost of automotive batteries has decreased by an average of 3% globally, leading to higher volume sales.

In Canada, the IEA notes that crucial infrastructure and EV incentives designed to meet net-zero emissions targets helped pave the way for job creation and the development of a plan for a more sustainable future. The report refers to the federal government's investment of CAD $1.5 billion to increase the production and use of low-carbon fuels; the Zero Emission Vehicle Infrastructure Program's funding of CAD $150 million to develop level 2 chargers (i.e. that use a higher output 240-volt power source), in multi-unit residential buildings and workplaces; and the federal government and Ontario CAD $295 million funding package to the Ford Motor Company to develop the largest Ford EV factory in North America.

However, the IEA warns that broader and more ambitious policies must be implemented by governments to accelerate the transition to EV. To maintain momentum in 2021 and beyond, the IEA considers that it is essential to expand EV policies and support packages. Such policies must address upfront investment costs, promote further charging infrastructure, and ensure a smooth integration of charging demand in power systems. Many governments can take advantage of social and environmental lessons learned from the pandemic. Regulatory policies should aim to encourage sustainable and low-emission technology investment and supporting employment and industry reskilling. For example, policies that provide zero-interest loans, incentives proportional to EV emission reductions, and differentiated taxation may offer an opportunity to accelerate the EV transition.

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