China domination of EV market continues, as sales hit record 6.6m in 2021

China continues to lead growth in the electric vehicle (EV) space, according to the International Energy Agency’s (IEA) latest EV market report, which revealed the country made up half of the world’s 6.6 million completed EV sales last year.

According to the report, 3.3 million EVs were sold in China in 2021, surpassing total global 2020 sales which climbed to 3 million.

Worldwide, the country accounts for 95% of new electric two- and three-wheeler registrations, and 90% of new electric bus and truck registrations.

In China, electric cars are typically smaller compared to other markets. The IEA found electric two- and three-wheeler vehicles accounted for 50% of China’s sales, with the pace of infrastructure roll out significantly overtaking most other regions.

Lower manufacturing and development costs have contributed to a decrease in the price gap with conventional cars, the report said. Last year, the median price of EVs in China was just 10% above that of conventional vehicles, compared to 45-50% for other major economies.

Market acceleration

The EV market has grown substantially over the last decade, with global sales totalling just 120,000 in 2012 and climbing to 6.6 million in 2021, according to the report, meaning last year over 120,000 EVs were sold each week.

The market shows little sign of abating, as the number of EVs on roads globally reached 16.5 million, triple the amount in 2018, and sales in the first quarter of this year climbed to 2 million, up 75% on the same period last year.

Sales also grew across Europe and the US, with European sales up 65% compared to 2020, climbing to 2.3 million, and sales in the US increased to 630,000, following two years of market decline.

China’s sales more than doubled in the first quarter of 2022, compared to the same time last year.

Regulatory push

According to the latest report from the Intergovernmental Panel on Climate Change (IPCC), falling costs for renewable energy and electric vehicles batteries, in conjunction with policy changes, have slowed the pace of climate change in the last 10 years.

EVs generated by low-emissions electricity “offer the highest decarbonisation potential for land-based transport, on a life-cycle basis,” it said.

At COP26, national governments and stakeholders pledged to accelerate the transition to 100% zero-emission cars and vans.

Signatories spanned emerging and developed economies, automotive manufacturers, fleet owners and operators, and investors with significant shareholdings in the automotive sector, including NatWest, Aviva, EOS at Federated Hermes and Impax Asset Management Group, among others.