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Electric cars are transforming the automotive industry. That’s good news for the climate

Electric cars are transforming the automotive industry.  That's good news for the climate

CNN — The global energy crisis sparked by the Russian invasion of Ukraine is causing hardship around the world and spotlighting the flaws in the current energy system. Volatile prices hurt consumers and businesses, while greenhouse gas emissions increase and air pollution kills millions every year.

But the current crisis could be a turning point for clean energy. Moving to a cleaner and safer energy system means tackling emissions in key greenhouse gas emission sectors: electricity, industry, transport and buildings. Transport relies on fossil fuels in all sectors, making electric vehicles vital for reducing emissions and harmful urban air pollution – and reducing countries’ dependence on oil imports.

Taking into account the latest trends and priorities of governments and companies worldwide, we now see incredible growth prospects for electric cars in the coming years. According to a new analysis to be published next month in the International Energy Agency’s flagship World Energy Outlook report, more than one in two cars sold in the United States, European Union and China could be electric by 2030. . This is an extraordinary transformation that we are experiencing in the three largest automotive markets in the world. Globally, the share of EVs in the car market could rise to nearly 40% from less than 10% last year.

But there’s still a huge amount of work to do for EVs to unleash their potential, and governments can help. Here they can start:

Enable automakers to rapidly scale production

Electric car sales are already growing strongly in Europe and China. The US has lagged behind, but that is now changing with the recent Inflation Reduction Act, which I believe is the most significant energy and climate action of any country since the Paris Agreement in 2015. For EVs, the law provides critical measures to boost production, boost sales and expand charging stations and other infrastructure.

In Europe, the Fit for 55 package will help further accelerate electric vehicle sales there by introducing strict emissions standards, phasing out combustion engine cars and vans by 2035 and supporting the deployment of charging stations to the public.

Outside of China, the EU and the US, EV growth has been much slower. Automakers need to strengthen supply chains and scale production quickly, and governments need to support this by providing incentives for production and removing bureaucracy.

Governments should also help companies ensure they have adequate and sustainably sourced supplies of the minerals such as lithium needed to make EV batteries. Countries must work together to secure critical mineral resources, as they have done for decades for oil security.

Offering tax discounts for consumers

The upfront purchase price for EVs is higher in most markets than for a gasoline car, but the Inflation Reduction Act includes measures to address this in the US, such as a tax credit of up to $7,500 per vehicle. Similar measures are already in place in European countries, and a tax exemption for electric vehicles in China was recently extended until the end of next year.

Due to the lower running costs of electric cars, owners can often recoup the extra money they pay to buy their vehicles within a few years. Even with today’s high electricity prices, EVs will remain the most cost-effective choice over time, according to a new IEA analysis.

Expanding electric vehicle sales in economies outside of China, Europe and the United States will require more than the efforts of automakers to expand their electric offerings beyond key markets. Governments will need to implement policy reforms and provide financial support to make electric vehicles the most affordable option. They will also need to build charging infrastructure to ensure there are enough chargers for a growing population of EVs.

Countries around the world are competing hard to try to be the leaders in this new emerging energy economy. And this competition is needed – it’s the cause of the massive cost reductions of solar, wind and EV batteries in recent years.

The current energy crisis is creating extraordinary difficulties, especially for the coming winter. But it has also opened the door further for the new global energy economy to replace more of the old. The astonishing growth of EVs is only just beginning, and with government support and continued technological advancements, it could take hold much faster.

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