Electric Car Prices to Match Conventional Cars by 2031, IEA Predicts

The IEA forecasts electric car prices to match conventional cars by 2024, with 1 in 5 cars globally expected to be battery-powered, driven by strong demand in China. Affordability and charging infrastructure remain key challenges.

author-image
Aqsa Younas Rana
Updated On
New Update
Electric Car Prices to Match Conventional Cars by 2031, IEA Predicts

Electric Car Prices to Match Conventional Cars by 2031, IEA Predicts

The International Energy Agency (IEA) forecasts that electric car prices will match those of conventional cars within the next seven years, with one in five cars sold globally in 2024 expected to be battery-powered. The IEA's Global EV Outlook report projects that global electric vehicle (EV) sales will rise by more than 20% to reach 17 million this year, driven by strong demand in China.

China is leading the charge in EV adoption, with electric car sales projected to rise to about 10 million in 2024, accounting for roughly 45% of all car sales in the country. The United States and Europe are also seeing significant growth, with electric cars expected to represent one in nine cars sold in the US and one in four in Europe this year.

The IEA attributes the rapid growth of the EV market to increased investment in battery manufacturing and production capacity, as well as ongoing policy support and falling car and battery prices. The agency predicts that by 2035, half of all cars sold globally will be electric under current policies, and this could rise to two-thirds if nations fulfill their energy and climate commitments.

Why this matters: The widespread adoption of electric vehicles has significant implications for the global fight against climate change and the transition to a more sustainable energy future. As EV prices become more competitive with conventional cars, it will accelerate the shift away from fossil fuels in the transportation sector, reducing greenhouse gas emissions and air pollution.

Despite the positive outlook, the IEA notes that affordability and charging infrastructure remain key challenges for the sector's growth. While electric cars are generally becoming cheaper as battery prices drop and competition intensifies, they are still less affordable than traditional vehicles in Europe and the United States. Meeting the growing demand for charging infrastructure will also pose a significant challenge, with charging networks needing to grow six-fold by 2035.

Fatih Birol, the IEA's executive director, stated that " global EV revolution appears to be gearing up for a new phase of growth, with the wave of investment in battery manufacturing suggesting the EV supply chain is advancing to meet automakers' ambitious plans for expansion." The IEA's report highlights the critical role that government policies, technological advancements, and market forces will play in shaping the future of the electric vehicle industry and the transition to cleaner transportation.

Key Takeaways

  • EV prices to match conventional cars within 7 years, 1 in 5 cars sold globally to be EVs by 2024.
  • China leads EV adoption, with 10 million EVs projected in 2024, 45% of total car sales.
  • EVs to represent 1 in 9 cars sold in US, 1 in 4 in Europe in 2024.
  • EV adoption driven by battery manufacturing, policy support, and falling car and battery prices.
  • Affordability and charging infrastructure remain key challenges for EV sector growth.