Small electric vehicle prices are expected to drop to the same level as gasoline models

According to reports, the International Energy Agency (IEA) has stated that by around 2025, the price of small electric vehicle models will drop to the same level as internal combustion engine cars in Europe and North America.

The Paris based IEA said that global sales of electric vehicles are expected to soar by 35% this year to 14 million units, accounting for 18% of the global passenger car market, compared to only 4% in 2020.

Our current expectation is that around 2025, we can see the prices of small and medium-sized electric vehicles drop to the same level as gasoline models in the North American and European markets, "said Timor Guel, Director of Technical Policy at IEA. Guell added that for large cars such as SUVs and pickups, this situation will only occur later, possibly after 2030.?

In the IEA's annual electric vehicle outlook, China holds an important position, accounting for half of the global electric vehicle ownership, including pure electric vehicles and plug-in hybrid vehicles, and 60% of global electric vehicle sales last year came from China. Guell stated that the prices of some small electric vehicles in China are gradually lower than those of internal combustion engine models in the same class.

The IEA has raised its sales forecast for electric vehicles this year, partly due to the introduction of the Inflation Reduction Act in the United States, which supports green industries and provides subsidies to consumers who purchase electric vehicles.

In the electric vehicle markets of China and Europe, nearly two-thirds of the vehicles are SUVs and large vehicles, with a higher proportion in the United States. In emerging and developing economies, the number of two wheel and three wheel electric vehicles exceeds that of electric vehicles. Research shows that more than half of the total registered tricycles in India in 2022 were electric vehicles.

Governments around the world are investing in the popularization of electric vehicles due to environmental concerns, in order to promote industrial policies and reduce dependence on oil. Fatih Birol, Executive Director of IEA, stated that as the industry transitions towards electric vehicles, global daily oil demand will decrease by 5 million barrels by 2030.

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