Global Demand for Electric Vehicles: China and the Inflation Reduction Law

According to Facts and Factors, global demand for electric vehicles (EVs) is estimated to exceed $980 billion by 2028, with a year-on-year growth rate of 24.5% between 2022 and 2028.

In particular, NaaS Technology highlights that China has been at the forefront of electric mobility on its path to carbon neutrality.

Currently, China is the largest EV market in the world and has witnessed continuous growth in EV sales.

As of December 31, 2022, China had a total fleet of 13.1 million EVs, accounting for 45.5% of the global fleet.

EV sales in China amounted to 6.9 million units in 2022, representing 61.0% of the global EV market and, according to the China Association of Automobile Manufacturers, are expected to reach 9.0 million in 2023.

As China makes a nationwide transition to electrification, the internal combustion engine car fleet is expected to peak at 327.4 million units in 2025 and experience a decline thereafter, while EV sales are expected to continue to experience exponential growth and surpass the number of ICE vehicles in 2036.

Global demand

By 2050, the EV fleet in China is expected to reach 328.2 million, which would account for 77.3% of the total fleet.

With another projection, DIGITIMES Research estimates that the global EV market sales volume will exceed 14 million units by 2023.

Among them, the Chinese and U.S. markets will continue to show high growth.

This is mainly due to the increase in the electric vehicle product lineup and the expansion of the scope of subsidies under the IRA (Inflation Reduction Act).

Conversely, although European automakers’ plans to invest in the EV business remain in place, they will continue to be affected by the Russian-Ukrainian war.

In the long term, electric vehicles will remain the fastest growing field among the world’s major industries.