New Delhi: Government policies to promote clean mobility globally and consumer awareness of the need to reduce their impact on the environment continued to see robust growth in 2021. As a result, consumer spending on electric cars doubled to reach nearly USD 250 billion, about eight times what was spent five years ago, says the International Energy Agency‘s (IEA) annual report on the sector.
IEA also highlighted that government spending, such as through purchase subsidies and tax waivers, also doubled to nearly USD 30 billion.
“The resulting government share of total spending for electric cars remained at 10%, down from about 20% only five years ago,” the Paris-based agency said.
In China, consumer spending nearly tripled to about USD 90 billion in 2021. Government spending also increased, doubling relative to 2020 levels to reach USD 12 billion. However, government spending on a per electric car basis decreased from about USD 5 000 to USD 3 750, in a declining trend since 2016 highs. The drop in 2021 reflects declining per unit subsidies and spiking sales, IEA report said.
Europe massively increased public spending on electric cars in the last two years. In 2019, public support for electric cars accounted for about USD 3 billion and levels have been rising steadily since 2016. In 2020, it more than doubled to USD 8 billion, and in 2021 it increased to USD 12.5 billion. Consumer spending similarly increased to USD 112 billion in 2021, resulting in a constant share of government spending since 2019 at about 10%.
While government spending to support electric car uptake increased as a whole, the per unit support level remained flat in the range of USD 5 000 – 6 000 over the 2019-2021 period, the agency noted. This reflects two mechanisms that balance each other: increasing per unit subsidies in Covid-related stimulus packages; and tightening eligibility requirements for subsidies with a vehicle price cap (for equity considerations).
In the US, consumer and government spending increased in 2021, although they lag behind levels in China and Europe. Consumer spending doubled to USD 30 billion relative to 2020 levels
and government spending tripled to USD 2 billion. Public spending on a per unit basis ranks lower than in other regions, at about USD 3200, which is above the support level of USD 2300 provided in 2020, but below the 2019 level of USD 4,500.
According to IEA, the global sales-weighted average price of battery electric vehicles (BEVs) in 2021 was just over USD 36, 000, down 7% relative to 2020, and stable at USD 51,000 for a PHEV.