EIA reports 2 million electric vehicles on the road worldwide

China overtook the United States in the number of electric vehicles sold in 2016. Energy.gov photo.

Electric vehicles make up 0.2 per cent of total number of passenger light-duty vehicles worldwide

The US Energy Information Administration reported on Wednesday that in 2016, there were 2 million electric vehicles on the road worldwide.

While that is an impressive two-fold increase from 1 million in 2015, the global electric vehicle stock is only 0.2 per cent of the total number of passenger light-duty vehicles in circulation.

“They have a long way to go before reaching numbers capable of making a significant contribution to greenhouse gas emission reduction targets,” the IEA said.

“In order to limit temperature increases to below 2 degrees Celsius by the end of the century, the number of electric cars will need to reach 600 million by 2040,” it added.

The EIA report said there is a “good chance” the global EV car stock could reach automaker estimates of between 9 million and 20 million by 2020 and between 40 and 70 million by 2025.

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According to Reuters, improvements in research and development as well as mass production have resulted in lower battery costs which will significantly decrease the cost competitiveness gap between electric vehicles and internal combustion engines.

While battery costs have fallen since 2009, they remain a major cost component of EVs, and have driven up the retail costs of the cars.

The agency says financial incentives, including rebates, tax breaks or exemptions are important to support EV development, but they may be phased out when the costs of electric vehicles come down and compete with internal combustion engines.

According to the report the EV market is concentrated in a limited number of countries where 95 per cent of electric vehicles sales are conducted, including China, the US, Japan, Canada, Norway, Britain, France, Germany, The Netherlands and Sweden.

In 2016, China became the country with the largest EV stock with about one third of the global inventory, taking over from the United States.