One in five new cars sold worldwide in 2024 will be electric, ING says

Roughly one in five new cars sold this year will be electric, according to forecasts by Dutch financial services group ING.

Why it matters: The transport sector accounts for about a fifth of the world’s greenhouse gas emissions, so decarbonising it will be critical to meeting climate goals.

Replacing petrol- and diesel-powered cars with electric versions will play an important role in the transition, as will efforts to expand public transport networks and make cities more bicycle and pedestrian friendly.

The latest: In 2023, 17% of new cars sold were electric (including plug-in hybrids), and that share will likely rise to 19% this year, ING says.

While some European countries have exceptionally high EV penetration rates, including Norway, China remains the main driver of the global shift, and ING sees no signs of a slowdown materialising in the country any time soon.

Some 9 million EVs were sold in the world’s second-largest economy in 2023, and Chinese-built cars also gained serious traction in the rest of the world. Electric models will hold a 35% market share in China in 2024, from 30% last year, according to ING.

While growth in Europe and the US is slower than previously expected, the share of EVs continues to rise, thanks in part to declining prices.

That’s despite the sudden termination of purchase subsidies in Europe’s largest market, Germany, and an end to subsidies in the UK.

Yes, but: The industry’s growth is being hindered by weak used-EV prices — which have come under pressure because of steep price cuts for newer models. Rental companies like Herz have responded by trimming their EV fleets.

EV sales are also being held back by high interest rates and a lack of public charging infrastructure in some regions, ING notes.

Nevertheless, EVs will account for 25% of car sales in Europe this year (up from 23%), and 11% in the US, where subsidies under the Inflation Reduction Act are starting to drive momentum.

ING says electric cars are edging closer to price parity with internal combustion engine models, “which is a positive signal for 2024.”

Thanks to several rounds of price reductions, a Tesla model Y now sells at below the average car price in the US.