Foreword The global automotive market has been undergoing asignificant transformation as it advances towards develop in establishing innovative transportation technologies ,focusing on green energy and electric vehicles.The changing enginesand propulsion systems; they also include upgrades in advancedsafety systems, smart energy management, and enhanceddriving experiences, among other features.Combining all these elements leads to the creation of more environmentally friendly, safe, efficient, and sophisticated vehicles.In Israel, the electric revolution is gaining momentum at an impressive pace. As of mid-2024, one in every four new cars sold in the country is an electric vehicle. At the same time,the number of electric car brands imported to Israel continues to grow, with the variety of brands available in the country expanding from around 50 in 2019 to over 70 in 2024. This expanding selection allows consumers to choose from a broader range of models that meet various needs while maintaining high-quality standards, technology, and design.This review aims to provide an in-depth overview of the electric vehicle market, both globally and locally, in Israel.It examines the regulatory and tax aspects that impact the sector, discusses charging infrastructure, and offers forecasts regarding the developments expected in the coming years,both worldwide and in Israel.Yaki Enoch,PresidentIsrael Vehicle Importers Association Hezi Shayb, Ph.DCEOIsrael VehicleImporters AssociationDr. Hanan GolanNavigating Electric Vehicles 2024 3Foreword 3Executive Summary 6Introduction 8
- A Global Perspective on Electric Vehicles –
Data and Trends 9
1.1 General Information 9
1.2 Global Distribution 11
1.3 Rest of the World 12
1.4 More BEV, Less ICE 14
1.5 Leading Global EV Manufacturers 16
1.6 Charging Infrastructure for EVs 18
1.7 Electric Vehicles in China 19
1.8 Electric Vehicles in Europe 21
1.9 Electric Vehicles in the US 24
1.10 Innovative and Alternative Technologies for EVs 25 - Electric Vehicle Regulation and Legislation 27
2.1 Policy and Regulation Designed to Encourage
the Adoption of EVs 27
2.2 Legislation in the USA 33
2.3 Legislation in the EU 34
2.4 Legislation in Other Countries 34
2.5 Legislation Regarding Batteries and Waste Batteries:
New EU Regulations 35
2.5.1 Regulation in Israel Concerning EV Batteries 37
2.5.2 The Position of the Israeli Vehicle Importers Association
(I-Via) Concerning the New EU Directive 37
Table of Contents
4 - Electric Vehicles in Israel 39
3.1 Legislation in Israel 40
3.2 EV Charging Stations in Israel 43 - Electric Vehicles – Forecast for 2030 45
4.1 A Global Forecast 45
4.2 Future Forecast: China 50
4.3 Future Forecast: Europe 51
4.4 Future Forecast: USA 52
4.5 Electric Vehicles in Israel: A Future Forecast 53 - Summary 55
Bibliography and Sources 56
Navigating Electric Vehicles 2024 5
Executive Summary
Electric vehicle (EV) sales have broken records and recorded
significant growth during the past few years. The beginning of this
trend is the aspiration of countries and governments to reduce air
pollution caused by the emission of pollutants from transportation
and the translation of this desire into a long series of regulations,
legislation, and goals for the transition to electric propulsion.
The review discusses the trend of EV adoption and presents data on
EV sales in different parts of the world, on policies and regulations
that pertain to EVs, and on various forecasts and scenarios regarding
the future of EVs worldwide.
The review presents the current situation in terms of the penetration
rate of EVs in the world, among others, in China, Europe, the USA, and
Israel, the leading EV manufacturers in the world, the state of the
charging infrastructure, and new technologies in the field of electric
vehicles. Globally, over 10 million EVs were sold during 2023, a 35%
increase compared to 2022. Around the world, there are about 35
million EVs on the roads today, a 40% increase compared with the
year before.
China, Europe, and the USA are the largest EV markets in the world.
Sales in them accounted for 95% of all EV sales in the world during
2023: 8.4 million units in China (about 30% market share), 2 million
units in Europe (15.7%), and 1.6 million units in the US (10.5%).
The first chapter of the review also presents the leading electric
vehicle manufacturers in the world: Tesla, BYD, SAIC, VW, and GeelyVolvo. At the end of the chapter, new technologies in the EV field that
may affect its future are presented, including fuel cell technology,
solid-state batteries, battery replacement, and wireless charging.
The second chapter discusses the regulation concerning EVs in
the world (in the USA, the EU, and Israel) and presents different
types of indirect and direct policies to promote the production and
consumption of EVs.
The third chapter of the review is dedicated to Israel, where 48,219
EVs were sold during the year 2023 (17.9% market share). The
chapter also presents the relevant legislation in Israel, including
economic incentives and travel tax.
6
The fourth chapter of the review presents various scenarios and
forecasts for EV sales worldwide, among others, in China, Europe,
the USA, and Israel, until the year 2030.
The review provides a current and future picture of the EV field and
is intended to be used as a basis for discussion, policy-making, and
decision-making in the field. Based on this review, it is possible to
learn what the main trends in the field of electric vehicles have been
over the past few years, both in terms of sales and regulation, what
changes have taken place over the past few years, and what the
future scenarios regarding EVs in Israel and around the world are.
Navigating Electric Vehicles 2024 7
Introduction
Over the past few years, there has been a rapid transition in the automotive industry
towards electric drive and electric vehicles. This change had and still has a considerable
impact on the automotive industry and, at the same time, also on consumers and
policymakers.
At the end of 2020, there were approximately 11 million EVs worldwide, while according to
the data of the research company Rho Motion, during the year 2023 alone, approximately
9.5 million pure electric vehicles (BEVs) were sold worldwide, in addition to 4.1 million
Plug-in hybrid vehicles (PHEVs).
The increase in the number of EVs is currently also characterized by an increasing pace:
in 2012, EV sales reached approximately 100,000 units, and it took them five years, until
2017, to reach approximately one million units per year. In contrast, in the five years that
have passed, from 2017 to 2022, the amount has increased ten times to about 10 million
units.
The scientific and technological foundations for electric vehicle propulsion already existed
at the end of the 19th century but were abandoned in favor of internal combustion
engines (ICE). The electric vehicle was “Resurrected” a few times throughout the
twentieth century, for example, following the fuel crisis in the seventies and later, thanks
to the regulation that dealt with reducing pollutant emissions from vehicles in the state
of California in the nineties. However, the great push and revival of the EV that we are
experiencing today are the result of a policy change in the areas of sustainability and
environmental protection by countries and governments during the 2000s.
In the years 2009-2012, there were critical changes in China’s policies regarding air pollution
arising from transportation. During these years, China became the country responsible for
the highest amount of carbon emissions in the world, and the Beijing Olympics held in
2008 also exposed the world to the air pollution problems it faced. The reaction of the
Chinese authorities was the enactment of laws that included many incentives for the
production and purchase of electric vehicles that do not pollute, alongside a massive
transition of the public transportation companies to electric buses, steps that made it
within a few years the EV market in the world.
Another significant change at the global level came in 2015 with the signing of the Paris
Agreement to reduce greenhouse gas emissions, signed by 195 countries, including Israel.
The agreement aimed to limit global warming by reducing greenhouse gas emissions,
primarily carbon dioxide. Since the transportation sector is responsible for approximately
23% of greenhouse gas emissions (in Europe, approximately 25%, and in the US,
approximately 29%), the importance of cleaner transportation came to the surface in full
force. It opened the door to a renewed global revival of electric vehicles.
8 - A Global Perspective on Electric Vehicles –
Data and Trends
1.1 General Information
According to data retrieved from ev-volumes.com, during the year 2023, 14.2 million
vehicles with electric drive (BEV and PHEV) were sold all over the world, an increase of
35% compared to 2022. The sale of pure electric vehicles jumped by 30% to approx. 10
million units. The research company Roh Motion reports that during this year, EV sales
in the US and Canada jumped by 50% compared to last year, 27% in Europe, and 15% in
China. Furthermore, for the first time, an EV – the Tesla Model Y – was the best-selling car
in the world, with approximately 1.23 million units in 2023.
Global BEV & PHEV Sales
T his graph shows global pure electric vehicle BEV and plug-in hybrid vehicle PHEV sales from
2014-2023 in thousands of units. The green columns represent BEV sales (the percentage
marked in white is the percentage of BEVs out of all electric vehicles BEV+PHEV), and the blue
part represents only PHEV sales. The red graph represents the share of electric vehicles from all
passenger vehicle sales. The row in black at the bottom of the graph represents the increase in
EV sales YOY. Source: www.ev-volumes.com
Navigating Electric Vehicles 2024 9
Global electric car stock in selected regions, 2010-2022
Global EV Outlook 2023 Trends and developments in EV markets
Catching up with climate ambitions
BY 4.0.
(Covid-19) pandemic. Seen in comparison to recent years, the annual growth rate
for electric car sales in 2022 was similar to the average rate over 2015-2018, and
the annual growth rate for the global stock of electric cars in 2022 was similar to
that of 2021 and over the 2015-2018 period, showing a robust recovery of EV
market expansion to pre-pandemic pace.
Figure 1.1 Global electric car stock in selected regions, 2010-2022
IEA. CC BY 4.0.
Notes: BEV = battery electric vehicle; PHEV = plug-in hybrid electric vehicle. Electric car stock in this figure refers to
passenger light-duty vehicles. In “Europe”, European Union countries, Norway, and the United Kingdom account for over
95% of the EV stock in 2022; the total also includes Iceland, Israel, Switzerland and Türkiye. Main markets in “Other”
include Australia, Brazil, Canada, Chile, Mexico, India, Indonesia, Japan, Malaysia, New Zealand, South Africa, Korea and
Thailand.
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such
data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the
West Bank under the terms of international law.
Source: IEA analysis based on country submissions, ACEA, EAFO, EV Volumes and Marklines.
Over 26 million electric cars were on the road in 2022, up 60% relative to 2021 and more
than five times the stock in 2018.
Half of the world’s electric cars are in China
The increase in electric car sales varied across regions and powertrains, but
remains dominated by the People’s Republic of China (hereafter “China”). In 2022,
BEV sales in China increased by 60% relative to 2021 to reach 4.4 million, and
PHEV sales nearly tripled to 1.5 million. The faster growth in PHEV sales relative
to BEVs warrants further examination in the coming years, as PHEV sales still
remain lower overall and could be catching up on the post-Covid-19 boom only
now; BEV sales in China tripled from 2020 to 2021 after moderate growth over
2018-2020. Electric car sales increased even while total car sales dipped by 3%
in 2022 relative to 2021.
0
5
10
15
20
25
30
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Million
China BEV China PHEV Europe BEV Europe PHEV
United States BEV United States PHEV Other BEV Other PHEV
Th is graph shows the number of EVs in different regions of the world in millions of units
between 2010-2022. Each color represents a different region and a different EV type (BEV or
PHEV). Source: IEA
The number of EVs moving on the world’s roads today is about 36 million, an increase of
60% between 2021 and 2022 and about 40% between 2022 and 2023. The peak occurred
in 2021, likely influenced by recovery efforts from the COVID-19 crisis, maintaining a high
growth rate from 2018 through 2023. However, during 2023, there was a certain slowdown
in the growth of the sales rate when explanatory factors could be the cancellation of
subsidies, the expectation of new and cheaper models, and high interest rates.
10
1.2 Global Distribution
The EV boom is not evenly distributed across geographic regions and markets, and there
are countries where sales volumes and market shares are significant compared to other
countries where almost no EVs are sold for various reasons. The regions that stand out,
especially concerning EV penetration, are China, Northern Europe (Scandinavian countries
and Western Europe), and North America. As the graph below shows, in developing
countries and the rest of the world, the penetration rates of EVs are still very low, and
this is mainly due to their high price, the lack of regulatory incentives to switch to EVs,
and outdated air pollution regulations that allow the use of polluting ICE vehicles.
Thi s graph shows the market share of pure electric vehicles (BEV) in selected regions of the
world during the third quarter of 2022. Source: JATO DYNAMICS
This is even more evident when looking at Europe alone. Evidently, for example, there are
very large differences between countries within Europe due to massive tax incentives
that brought EVs very high market shares during 2023 in Scandinavian and Northern
European countries, such as Norway with 82% of deliveries, Iceland with 53%, Sweden
with 39%, Denmark with 36%, and Finland with 34 %, while in Europe as a whole, the
average market share is only 15%.
Navigating Electric Vehicles 2024 11
This map shows the EV market share in selected European countries in 2023. Source: JATO
DYNAMICS
1.3 Rest of the World
China, Europe, and North America are the largest markets in the world for EVs –
approximately 95% of sales in 2023, according to the IEA (International Energy Agency)
data. Sales in emerging markets and developing countries (EDME) constitute only a
fraction of the global demand for EVs, and despite an increase in demand, the level of
sales in such markets and countries is still low.
In certain countries, such as India, Thailand, and Indonesia, EV sales have increased up to
seven times in 2022 compared to 2019 before the COVID crisis and three times more than
in 2021. Close to 80,000 deliveries have been made in these countries, of which 50,000
have been in India, most of them manufactured by Tata.
In Thailand, 21,000 electric vehicles (BEV and PHEV) were sold, during 2022, largely thanks
to the accelerated penetration of Chinese manufacturers such as Great Wall Motors, which
entered the Thai market in 2021 and already a year later, its Ora 03 model (previously Ora
Funky Cat) became the best-selling EV in the country. The second best-selling model is
manufactured by the Chinese SAIC, which also entered the Thai market for the first time
in 2021.
In Indonesia, the number of EVs sold was multiplied 14 times between 2021 and 2022, and
this was after the Indonesian government’s entry into force of a new subsidy program.
Indonesia, as a country with the largest nickel mines in the world, also plays an important
role in the EV supply chain, attracting foreign investment that may make it a major player
in the production of batteries and components for EVs.
One of the main issues in the sale of EVs in EDME countries is the range of models,
which mainly includes large electric SUVs that are not accessible to the majority of the
population.
12
PAGE | 30
IEA. CC BY 4.0.
high-end and mass markets. It announced over USD 900 million of investments for
battery and EV manufacturing in Southern India, and an increase in annual
production from 100 000 to 140 000 vehicles.
Figure 1.8 Electric car sales by powertrain (columns) and available models by car
size (lines) in selected regions, 2018-2022
IEA. CC BY 4.0.
Notes: BEV = battery electric vehicle; PHEV = plug-in hybrid electric vehicle. “GEF” refers to the Global Environment Facility’s
Global E-Mobility Programme, which was launched in 2019 and supports 27 countries in their shift to electromobility. In Africa,
edium cars include C and D segments. Crossovers are a type of sports utility vehicle (SUV) built on a
passenger car platform. Large cars include E and F segments and multi-purpose vehicles.
Source: IEA analysis based on Marklines.
The number of available electric car models reached 500 in 2022 but remains far below the
number of ICE options. Large cars and SUVs still account for over half of available BEVs.
The 2022 trend reflects the increasing maturity of EV markets and demonstrates
that carmakers are responding to increasing consumer demand for electric cars.
However, the number of electric car models available remains much lower than
that of conventional ICE cars, which has remained above 1 250 since 2010 and
peaked at 1 500 in the middle of the past decade. In recent years, the number of
ICE models sold has been steadily decreasing, at a compound annual growth rate
of minus 2% over the 2016-2022 period, reaching about 1 300 models in 2022.
This dip varies across major car markets and is most pronounced in China, where
thenumberofavailableICEoptionswas8%lowerin2022thanin2016versus0
1.4 More BEV, Less ICE
The electrification race has resulted in more and more EV models being offered. In 2018,
around 220 pure electric models were sold worldwide, in 2021, the number doubled to
around 450 models, and in 2022, there were already around 500 different models. The
widest range is in China, with nearly 300 different models – twice as many as in European
countries such as Norway, Britain, Germany, Sweden, the Netherlands, and France, each
with about 150 electric models offered on the market. In the US, the number of electric
models offered on the market reached 100 in 2022, double the number before the
COVID-19 epidemic. While these are impressive numbers, they are still far from the supply
of internal combustion models that reached their peak in the middle of the last decade
with 1,500 models and have since been stable at around 1,250 models. However, it should
be noted that while the number of electric models on the market is on an increasing
trend, the number of ICE models offered has decreased by 2% per year since 2016.
These graphs show the availability of different car models (according to the number of models
in thousands) by type of drive between the years 2010-2022 (left graph) and the distribution
of the types of models by segment in different regions of the world (right graph). In the left
graph, it can b seen that over the years there has been an increase in the number of BEV and
PHEV models offered in the world alongside a slight decrease in the number of ICE models. In the
graph on the right, it can be seen that of all the BEV models that are offered, a large part are
SUV models and large vehicles, mainly in North America. Source: IEA
14
This graph shows the number of electric models that are offered in different markets in the
world according to the segment to which they belong in 2022 compared with 2018. It can be
seen that besides a significant increase in the number of models offered, most of them are SUV
models; on the other hand, the smaller models represent only a minor percentage. Source: IEA
PAGE | 25
IEA. CC BY 4.0.
markets and developing economies (EMDEs). The historic number of ICE models
available on the market suggests that the current number of EV options could
double, at least, before stabilising.
Figure 1.6 Electric car model availability in selected countries by size, 2018-2022
IEA. CC BY 4.0.
Notes: NL = the Netherlands; UK = United Kingdom; USA = United States; SUV = sports utility vehicle. Includes battery
electric vehicles and plug-in hybrid electric vehicles. Countries are ordered by the number of available models in 2022.
Analysis based on models for which there was at least one new registration in a given year; a model on sale but never sold
is not counted, and as such actual model availability may be underestimated.
Source: IEA analysis based on Marklines.
In 2022, 7 countries had around 150 EV models or more available for sale, up from 50 in - The number of large models is increasing more quickly than that of small models.
SUVs and large car models dominate both EV and ICE markets
A major concern for global car markets – both EV and ICE – is the overwhelming
dominance of SUVs and large models among available options. Carmakers are
able to generate higher revenues from such models, given higher profit margins,
which can cover some of the investments made in developing electric options. In
certain cases, such as in the United States, larger vehicles can also benefit from
less stringent fuel economy standards, hence creating an incentive for carmakers
to slightly increase the vehicle size of a car for it to qualify as a light truck.
However, large models are more expensive, which poses significant affordability
issues across the board, and all the more so in EMDEs. Large models also have
China Norway NL Germany Sweden France UK USA Canada Japan Korea
Available models
SUV Large Crossover Medium Small
Electric car model availability in selected countries by size, 2018-2022
Navigating Electric Vehicles 2024 15
1.5 Leading Global EV Manufacturers
Most car manufacturers registered an increase in sales during the year 2023, with EV
sales growing by 35% compared with 2022. Chinese BYD increased the gap at the top
thanks to an extensive product line that includes 30 different models in 10 segments and
the sale of over 3 million units, including PHEV models. The largest pure electric vehicle
(BEV) manufacturer is Tesla, with a global market share of 18%.
This table shows BEV sales of the top five manufacturers in the world by number of units during
the year 2023. Source: www.ev-volumes.com
Top auto alliances that sell plugin Vehicles January – December 2023
16
Global EV sales by OEM / OEM GROUP FOR 2023
This table shows BEV+PHEV sales of different car manufacturers in the world in thousands
of units during the year 2023. The right column represents the percentage change in sales
compared with 2022. Source: www.ev-volumes.com
Navigating Electric Vehicles 2024 17
PAGE | 44
IEA. CC BY 4.0.
184 000 charging points.
Fast chargers
Publicly accessible fast chargers, especially those located along motorways,
enable longer journeys and can address range anxiety, a barrier to EV adoption.
Like slow chargers, public fast chargers also provide charging solutions to
consumers who do not have reliable access to private charging, thereby
encouraging EV adoption across wider swaths of the population. The number of
fast chargers increased by 330 000 globally in 2022, though again the majority
(almost 90%) of the growth came from China. The deployment of fast charging
compensates for the lack of access to home chargers in densely populated cities
and supports China’s goals for rapid EV deployment. China accounts for total of
760 000 fast chargers, but more than 70% of the total public fast charging pile
stock is situated in just ten provinces.
Figure 1.13 Installed publicly accessible light-duty vehicle charging points by power
rating and region, 2015-2022
IEA. CC BY 4.0.
Note: Values shown represent number of charging points.
Source: IEA analysis based on country submissions.
Installed publicly accessible charging points have increased by around 55%, with
accelerated deployment led by China and Europe.
In Europe the overall fast charger stock numbered over 70 000 by the end of 2022,
an increase of around 55% compared to 2021. The countries with the largest fast
charger stock are Germany (over 12 000), France (9 700) and Norway (9 000).
There is a clear ambition across the European Union to further develop the public
charging infrastructure, as indicated by provisional agreement on the proposed
China Europe United States Other countries
Thousand
Fast chargers Slow chargers
These graphs show the number of charging stations that exist in different regions of the
world between the years 2015-2022 by type of station (fast stations in the left graph, regular
stations in the right graph). Source: IEA
Different regulatory initiatives in various countries have been formulated to speed up
the deployment of charging infrastructures – for example, the AFIR (Alternative Fuels
Infrastructure Regulation) agreement in Europe or the NEVI (National Electric Vehicle
Infrastructure Formula Program) in the USA, but as it can be seen in the following graph,
the accelerated growth in the purchase of EVs means that the charging infrastructures,
in most countries of the world, are lagging in relation to the number of vehicles that they
are supposed to cater for.
Installed publicly accessible light-duty vehicle charging points by power
rating and region, 2015-2022
1.6 Charging Infrastructure for EVs
Widespread deployment of EV charging infrastructure is critical to the adoption of EVs,
especially in dense urban areas where access to home charging is more complicated,
although the latter currently meets most of the charging demand. According to IEA
(International Energy Agency) data, at the end of 2022, there were around 2.7 million
public charging stations worldwide – around 900,000 of which were installed during 2022.
China, with about a million standard charging stations (22kW or less), is a global leader,
followed by Europe with 460,000 stations. Concerning fast charging stations, the picture
is similar; when at the end of 2022, there were 760,000 fast charging stations in China
compared to 70,000 in Europe and 28,000 in the USA.
18
This graph shows the number of EVs (light vehicles) in relation to the number of charging
stations in different countries in the world between the years 2015-2022. In most countries
shown in the graph (except for Korea and the Netherlands), the amount of EVs per charging
station is increasing over time, which means The current situation indicates that charging
infrastructure is lagging behind the growth in electric vehicle numbers. Source: IEA
1.7 Electric Vehicles in China
China constitutes the largest EV market in the world, with 8.4 million units, in 2023. China
is also the largest EV producer – 65% of global EV sales come from China. About 900,000
EVs were exported from China during the year 2023, and the major exporters were Tesla,
SAIC (MG, Maxus), Geely (Volvo, Polestar, Lynk, Smart), BYD, and Renault (Dacia).
According to data from the China Passenger Car Association (CPCA), about 9.5 million of
the 30 million new vehicles that hit the roads in 2023 were “New Energy Vehicles” (NEVs),
mainly electric and plug-in vehicles. This is about 39% YOY growth, bringing the total
number of new energy vehicles in China to 20.41 million at the end of 2023, of which
15.52 million were pure electric vehicles (BEVs).
China VS. The World
The huge increase in EV sales in China compared to other countries is explained by
regulatory support, but at the end of the day, this is mainly reflected in EV prices, and
those in China are significantly cheaper compared to the rest of the world. In 2022, the
average price (sales-weighted average price) of a small EV was less than $10,000 – this
compared to Europe and the USA, where the corresponding price was more than $30,000.
Global EV Outlook 2023 Trends and developments in EV markets
Catching up with climate ambitions
. CC BY 4.0.
Figure 1.15 Electric light-duty vehicle per public charging point, 2010-2022
IEA. CC BY 4.0.
Note: Charging points include only publicly available chargers, both fast and slow.
Source: IEA analysis based on country submissions.
Countries show different speeds in public charging deployment as the number of EVs on
the road increases.
Perhaps more important than the number of public chargers available is the total
public charging power capacity per EV, given that fast chargers can serve more
EVs than slow chargers. During the early stages of EV adoption, it makes sense
for available charging power per EV to be high, assuming that charger utilisation
will be relatively low until the market matures and the utilisation of infrastructure
becomes more efficient. In line with this, the European Union’s provisional
agreement on the AFIR includes requirements for the total power capacity to be
provided based on the size of the registered fleet.
Globally, the average public charging power capacity per electric LDV is around
2.4 kW per EV. In the European Union, the ratio is lower, with an average around
1.2 kW per EV. Korea has the highest ratio at 7 kW per EV, even with most public
chargers (90%) being slow chargers.
World China Korea Netherlands United States Norway Japan
Electric light-duty vehicle per public charging point, 2010-2022
Navigating Electric Vehicles 2024 19
These two gr aphs show the average price (left graph, in US$) and driving range (right graph, in
Km) of EVs in different markets worldwide according to segments. Source: IEA
The best-selling models in China a year ago were the Wulling Mini BEV, priced at less
than $6,500, and the BYD Dolphin, priced at less than $16,000. These two models alone
accounted for about 15% of electric passenger car sales in China in 2022. In contrast, the
cheapest electric models that year in France, the UK, and Germany were the Fiat 500e,
Peugeot e-208, and Renault Zoe, all priced at more than $35,000. Almost no small EVs are
offered in the US, mainly the Chevrolet Bolt and Mini Cooper BEV, whose prices are around
$30,000. The best-selling model in both Europe and the US, was the Tesla Model Y, at a
cost of about $50,000 in the US and $65,000 in Europe.
The Chinese manufacturers have concentrated on developing small and cheap models and
thanks to the intense competition in the local market, have become more efficient and
reduced costs over the years. Moreover, vertical integration in the supply chains, from
mineral processing to batteries to the production of EVs, as well as cheap labor, helped
them offer cheap models and make EVs accessible to the customers. The car manufacturers
in Europe and the USA, on the other hand, like Tesla, for example, concentrated mainly on
the development of large and luxury models.
PAGE | 27
IEA. CC BY 4.0.
support, but also cheaper retail prices. In 2022, the sales-weighted average price
of a small BEV in China was below USD 10 000. This is significantly less than the
prices of small BEVs found in Europe and the United States, where the salesweighted average price exceeded USD 30 000 in the same year.
Figure 1.7 Sales-weighted average retail price (left) and driving range (right) of BEV
passenger cars in selected countries, by size, in 2022
IEA. CC BY 4.0.
Notes: BEV = battery electric vehicle; SUV = sports utility vehicle. ‘Europe’ is based on data only from France, Germany
and the United Kingdom. Retail prices collected in 2022-2023, before subsidy.
Source: IEA analysis based on EV Volumes.
In 2022, BEV passenger cars remained much cheaper in China, which explains in part
higher adoption rates there.
China Europe United States
USD (2022)
Small cars Medium cars SUVs and crossovers Large cars
China Europe United States
km
Sales-weighted average retail price (left) and driving range (right) of BEV
passenger cars in selected countries, by size, in 2022
20
1.8 Electric Vehicles in Europe
General
The auto industry is the jewel in the crown of the European economy and for many
years has contributed to its growth. According to data from the McKinsey consulting
firm, a network of approximately 17,300 companies, including car manufacturers, OEM
manufacturers, and suppliers of all levels, constitutes approximately 7% of Europe’s GDP
and directly or indirectly employs approximately 14 million people.
However, over the past few years, the industry has encountered many challenges, chief
among them the transition to electric propulsion, which allowed the penetration of new
competitors into the European market, led by the Chinese auto industry. In 2022, China
overtook Germany in vehicle exports with about 3 million units compared to 2.6 million of
the traditional auto superpower. These changes add to inflation and soaring energy costs,
which also challenge the European automotive industry.
In recent years, various industries in Europe have undergone a significant change that did
not favor the local industry; for example, according to the data of the research company
McKinsey, European smartphone manufacturers lost 90% of their market share in just six
years, and a similar process went over the European camera industry. In the automotive
industry, new players specializing in EV production hold a market share of 51% of the
global BEV market. In order to deal with the changes in the market, the European
automotive industry will have to adapt to the new situation and recently the various car
manufacturers announced the launch of no less than 150 new electric models by 2030.
The transition to electric drive also brings along a shift in emphasis from hardware to
software, not only in the drive unit but also in everything related to safety and driver
assistance systems and connectivity. This change turns the semiconductor and battery
industries into control points in the industry, something that did not exist before and
requires new capabilities. A modern car, for example, can contain up to 150 different
control units in a distributed software architecture – this is a significantly larger amount
than it was a few years ago.
EVs Fuel the Increase in Car Sales
The European car market recovered from the COVID crisis during the year 2023 and
recorded the largest number of deliveries since the outbreak of the epidemic, with
approximately 12.8 million units delivered, an increase of 14% compared to last year.
Navigating Electric Vehicles 2024 21
This graph shows passenger car licensing data in Europe from 2014-2023 in millions of units. The
right column represents the percentage of change between the year 2023 and previous years.
Source: JATO DYNAMICS
A significant part of the increase in sales in Europe during 2023 was driven by EVs that
reached a market share of 15.7% with just over two million units, according to JATO
Dynamics data. These data strengthened Europe’s position as the second-largest EV
market in the world after China (about 5 million units) and before North America (1.07
million units). Also, there is a significant change in the sales mix in terms of the type of
propulsion and fuel, where EV sales are almost equal to diesel vehicle sales, with a market
share of 16% for each of them. In this context, it should be noted that the best-selling
model in Europe during the year 2023, as well as in the entire world, was the Tesla Model
Y, with 251,504 units, representing an 84% increase in sales compared to the year before
it. However, this model is the only electric one in the list of the ten best-selling models
on the continent.
New passenger cars registrations in Europe-28 (million units) 2014-2023
This graph shows the sales mix of new cars in Europe by drive type (ICE, BEV, or PHEV) and fuel
(diesel or petrol) between 2019-2023. It can be seen that the share of electric cars is increasing
while sales of diesel cars are decreasing, and sales of gasoline cars remain stable. Source: JATO
DYNAMICS
New passenger cars registrations mix by fuel-type
Europe-28 (million units) 2019-2023
2019 2020 2021 2022 2023
22
JATO Dynamics published another interesting figure regarding EV sales. According to this
figure, the sale of EVs to businesses and fleets grew by 51% during 2023 compared to a
growth of only 4% in sales to private customers. At the end of the day, JATO people claim
that only 39% of EV sales in Europe are to private customers, a decrease of 9% from 2022.
ACEA (European Auto Manufacturers Association) data shows that EV sales grew in 2023
by approximately 28%, although in December, they decreased by approximately 25%
compared to December last year (mainly due to sales data in Germany where EV sales
were cut in December by about 50% due to the advance of the EV subsidy cancelation).
Some of the manufacturers, including the VW Group, Mercedes, and Tesla, announced
that they were absorbing the cancellation of the subsidy, but this was not enough to stop
the drop in demand.
According to forecasts by leading analysts, in 2024, the trend of slowing demand will
continue due to the increase in the cost of financing, slow economic growth in some
countries, and a decrease in demand for EVs. According to some forecasts, sales growth
in Europe will be only about 5% in 2024.
The Penetration of Chinese Brands and Tesla
Chinese brands have greatly influenced and continue to influence the European car
market. During 2022, 23 Chinese car brands operating in Europe were joined by seven
more. Together, these recorded approximately 322,000 deliveries, an increase of 79%
compared to 2022. However, the Chinese brands’ market share out of total deliveries still
reaches only 2.6% (1.7% in 2022).
Only eight Chinese brands registered over a thousand deliveries in Europe, with the MG
brand responsible for 72% of the total deliveries of all Chinese brands. It has more than
doubled its deliveries compared to 2022 and holds a market share of 1.81% in Europe.
According to JATO Dynamics data, MG’s largest market is the UK (35% of sales), but it also
recorded tremendous growth in other markets in the past year, such as France (+165%),
Italy (+311%), and Spain (+321%). Its MG4 model was the fourth best-selling EV in Europe
in 2023.
A growing trend is also evident in Tesla’s European sales, which in 2023 registered
approximately 362 thousand deliveries in Europe and captured a market share of 2.83% –
a record figure for it and an increase of 56% compared to last year.
Leading EV Models
As mentioned, the best-selling EV in Europe during 2023 was the Tesla Model Y, with
approximately 252,000 units sold. In second place is the Tesla Model 3, with 100,883
units, followed by VW ID.4 (85,088), MG4 (72,212), Skoda Enyaq (66,247), Fiat/Abarth
e500 (64,244), VW ID.3 (63,460), Dacia Spring (59,186), Volvo XC40 (50,976), and BMW i4
(48,958).
Navigating Electric Vehicles 2024 23
This graph shows EV sales in the US in millions of units between 2016-2023. Source: www.
marketwatch.com
U.S. electric car sales 2016-2023
1.9 Electric Vehicles in the US
EV deliveries in the US increased by 48% during 2023 to 1.617 million units (BEV+PHEV).
This figure indicates only a limited impact of the IRA law, at least at this stage.
Similar to many other markets, Tesla’s dominance stands out in the American market,
whose sales make up more than half of the market.
This graph shows the market shares of leading manufacturers in the US electric vehicle market
between January and October 2023. Source: www.marketwatch.com
U.S. EV market share
From January to October 2023
24
US Consumers enjoy the tax benefits provided as part of the Clean Vehicle Tax Credits and
extended as part of the Inflation Reduction Act in 2022. The incentive program of the US
government is spread out until 2032 and includes various limits on the price of the vehicle,
its weight, where it is manufactured, and the annual income of the household that buys it.
1.10 Innovative and Alternative Technologies for EVs
Most pure electric vehicles (BEVs) today are based on lithium-ion batteries or similar.
These have proven to be efficient and reliable, but at the same time, they are expensive
to produce and based on critical raw materials that are in short supply. Alongside these
batteries, several alternative and new technologies may change the way an EV is used;
below is a brief overview of some of them.
Fuel-Cell Technology
Auto manufacturers such as Mercedes, Toyota, Hyundai, and others have
developed fuel cell technology to drive electric vehicles. In contrast to
lithium-ion, lithium-polymer, or nickel metal hydride batteries, which do
not need fuel, in an electric motor powered by Fuel-Cell fuel cells, there is
an electrochemical cell that converts chemical energy into an electric current. The fuel
cell includes an electrolyte and a catalyst; inside it, a chemical reaction occurs between
hydrogen and oxygen. The oxygen comes from the air, while the hydrogen comes from
a hydrogen tank, similar to a fuel tank. In the electricity production process, there is no
combustion and no emission of pollutants, only water.
FCEV (Fuel Cell Electric Vehicle) electric vehicles have proven themselves to be efficient
and safe, with the main limitation of their use being the deployment of a liquid hydrogen
refueling network. Such a network is part of plans to deploy charging and refueling
networks for alternative fuels in both the US and Europe, but at this stage, the existence
of hydrogen refueling stations (even in Israel there are few individual stations) is still
limited.
Solid State Batteries
Lithium-ion batteries contain liquids (or gel) that damage the stability of the
battery and take time to charge and discharge. To deal with this situation,
batteries are currently being developed, which are based on solid materials
that will replace the liquid or gel, and the electricity production process will
take place inside them. The benefits of this change are efficiency over a much larger
temperature range, faster loading and unloading, and a higher level of stability. Other
advantages of solid-state batteries are high energy density, avoiding the use of toxic
substances present in organic electrolytes, reduced risk of ignition, high voltage, and long
cycle life.
Navigating Electric Vehicles 2024 25
Battery Swapping
Shai Agassi and Renault’s Better Place project operated a fleet of electric
vehicles that, instead of charging their batteries, set up stations to replace
the empty battery with a full one. In other words, the vehicle battery was
offered as a type of service for a monthly fee and not as part of the product,
thereby reducing the purchase cost of an EV in which the battery is a central component.
This venture failed for various reasons, but today, manufacturers and operators are again
considering the option of replacing the battery instead of charging it.
But alongside the benefits of battery swapping, this mechanism also carries challenges.
First, having more than one battery per vehicle is necessary to ensure availability at the
exchange stations. Some companies base their activity on an average of two batteries per
vehicle, a factor that may affect the demand for critical minerals to create batteries if the
method is widely adopted. In addition, the cost of setting up battery swapping stations is
high and ranges from $390,000 to $1.4 million – much more than an EV charging station.
Replacing batteries also requires a degree of standardization that will allow replacement
between the different models of different manufacturers. Because of this, despite the
interest of various bodies, the success of battery-swapping technology depends mainly
on local factors, local regulations, and the market structure for EVs.
China, for example, is the world leader in this field, with over 2,000 battery swapping
stations at the end of 2022 (an increase of 50% compared to 2021), of which 1,300 are
from the manufacturer NIO, which produces models that enable battery replacement.
The company has set itself a goal of operating 4,000 exchange stations in China by 2025.
NIO exchange stations have also been established in Norway, Sweden, Germany, and the
Netherlands.
The Chinese swapping station operator Aulton, for example, supports 30 models from
16 different manufacturers, in contrast to NIO’s stations, which are only suitable for the
company’s models. There are also battery exchange stations in the US, for example, by
Ample, which operates about 12 such stations in the San Francisco Bay area, mainly for
Uber vehicles.
EV Wireless Charging
For several years now, companies worldwide, including Israeli Electreon,
have been developing systems for wireless charging of electric vehicles.
In addition to the possibility of wireless charging at a charging station, a
promising technology that is in advanced trial stages in various parts of the
world is wireless charging using a system located under the road, which means that the
vehicle is charged while driving and does not require a stop to charge at all. In Europe and
the USA, roads have been built in several places that include a wireless charging system
and experiments are being carried out on them in advanced stages.
26 - Electric Vehicle Regulation and Legislation
The differences between the various EV markets in the world are largely due to different
levels of government support, and the three largest markets, China, Europe, and North
America, grew mainly from regulatory initiatives designed to encourage demand for EVs
by providing purchase benefits to customers and/or incentives for EV manufacturers.
In these markets, which have reached a certain degree of maturity with increasing EV
market shares, the benefit and incentive programs are on the decline; some have ended
while others offer reduced, and the focus is shifting from concentrating on increasing
the demand and supply of electric passenger vehicles to other areas such as electric
transport and commercial vehicles or deployment charging infrastructure.
At the same time, many governments and countries are setting more ambitious goals
than before for the adoption of EVs and with their plans to address other parts of the
supply chain, for example, by supporting the production of batteries for EVs and building a
supply chain for essential materials such as nickel, cobalt and lithium. In general, according
to the IEA data, the expenditure of countries and governments for the promotion of
EVs during 2022 amounted to about 400 billion dollars, and over 90% of the sales of
electric passenger vehicles in the world were supported by government policies designed
to encourage the use of EVs.
Two notable recent examples are the American Inflation Reduction Act (IRA) and the
tightening of air pollution regulations in the EU, which have had and will continue to have
a major impact on the road to pollution-free transportation in Europe and the US (see
more detail on this topic below).
A central part of the policies, laws, and regulations regarding EVs are the goals set by
the countries for their adoption, such as banning the marketing and sale of ICE vehicles,
reaching 100% non-polluting vehicles, etc. Most of these goals are set for short or medium
periods, and concerning electric passenger vehicles, over 50% of global sales today are
related to goals set until 2035 or before.
2.1 Policy and Regulation Designed to Encourage the Adoption of EVs
The incentives provided by states and governments to encourage the use of EVs can
be sorted into several types: regulatory incentives, economic incentives, incentives for
infrastructure and national projects, incentives to increase awareness, and incentives
for research and development. In addition, a distinction can be made between direct
incentives, such as a discount on car prices, and indirect incentives, such as a discount on
travel fees or free parking for EVs.
Regulatory Incentives
Regulatory incentives are those based on government goals such as goals for ZE
(Zero-Emission) vehicle sales volume, mandatory goals for carbon dioxide emissions from
new vehicles, and goals for the deployment of charging infrastructure.
Navigating Electric Vehicles 2024 27
In the EU, for example, the European Green Deal program was adopted for the transition to
a green and sustainable economy, which was anchored in the climate law in the European
Parliament in 2021 and includes reaching a state of zero emissions by 2050. Reaching the
goal should happen thanks to a gradual reduction of the average emissions from vehicles
- in the EU, manufacturers are required to reach a decreasing CO2 emission average, while
a manufacturer that does not reach the targets is highly fined. This requirement causes
the range of models offered on the market to pollute less and less when manufacturers
are motivated to produce electric models or models with low emissions to reach the
required average emissions and not be fined. “Clean” models, such as electric ones, are
also overweighted in calculating the average CO2 emissions (Super Credits).
At the same time, countries also set goals for banning the sale of vehicles with an internal
combustion engine (ICE) in the EU, for example, until 2035, as well as for the deployment
of infrastructure as part of the European Alternative Fuels Infrastructure (AFID).
Global EV Outlook 2023 Policy developments and corporate strategy
Catching up with climate ambitions
Figure 2.2. Global zero-emission vehicle mandates and internal combustion engine
bans
IEA. CC BY 4.0. - Refers to the share of passenger light-duty vehicle sales accounted for by Advanced Clean Cars II (ACC II) signatories or
proposed signatories.
Notes: ICE = internal combustion engine; ZEV = zero-emission vehicle; “electrified” includes hybrid electric vehicles (HEVs)
in addition to electric vehicles (EVs) and fuel cell electric vehicles. European Union countries with LDV targets earlier than
the EU 2035 target are included separately. Only countries that have legislated or proposed an ICE ban or 100%
electrification target have been included. The proposed EU heavy-duty vehicle CO2 standards include a 100% emission
reduction target only for urban buses, and are thus not included in the chart. The Global Memorandum of Understanding
(MoU) on Zero-Emission Medium- and Heavy-Duty Vehicles is a pledge and is therefore also not included.
Source: IEA analysis based on announced policies; see the Global EV Policy Explorer for further details.
Zero-emission vehicle targets are now in place in an increasing number of countries,
including in emerging markets and developing economies.
Policy to develop EV supply chains
Policy increasingly aims to boost manufacturing, not just
deployment
Economic Incentives for EV Purchasing
These incentives are intended to make EVs accessible to customers and make their
purchase cheaper and more profitable. Among the economic incentives for the purchase
of an EV can be a reduced purchase tax, exemption or discount in licensing, exemption
from VAT or import tax, government grants for the purchase of an EV, and special grants
for those with low incomes.
In Israel, for example, EV buyers enjoy a reduced purchase tax (the scope of which
changes over the years). In countries such as Belgium, Greece, Hungary, the Netherlands,
and Portugal, a full exemption from registration tax is granted when purchasing an EV,
and in Norway, an exemption from VAT is granted (up to a ceiling price of $52,000).
Economic Incentives to EV Owners
Even after the purchase, the ownership and maintenance of an EV can be made more profitable
through an exemption or discount on the annual traffic tax (Annual Circulation Tax) as well as
a tax reduction for EV owners or tax benefits for installing a home charging station.
An exemption or discount in the annual traffic tax is given, for example, to EV owners
in Austria, Belgium, the UK, the Netherlands, and other countries. Belgium, Portugal, and
Denmark grant tax reductions to companies that use EVs, and in Sweden, a tax discount
is given to those who install a charging point in their home. In Israel, also, various benefits
are provided, such as a reduced annual license fee and a reduced value of use for an EV
compared to a vehicle with an internal combustion engine.
“Soft” Economic Benefits
Soft benefits are those that do not involve a direct transfer of funds, such as free city
parking or priority in obtaining a parking ticket, free public charging stations, a permit to
use bus lanes, access to ZE zones, etc. Free or discounted parking is given to non-polluting
vehicles in several cities in the US, such as Nashville, Tennessee, Miami Beach, Florida, and
Cincinnati, Ohio.
Additional Incentives
Among the other ways to encourage the use of EVs are incentives to expand the
charging network, the purchase of EVs for the government/municipal fleet, electric public
transportation, collaborative car ventures, incentives to increase public awareness, and
financial incentives for research.
In the USA, for example, already at the end of 2021, a presidential decree was signed
according to which the entire government vehicle fleet will be obliged to switch to ZE
vehicles by 2035 and all light vehicle fleets will be zero-emission by 2027. In Israel, in
accordance with the decision of the Accountant General, the Government Vehicle
Administration is obliged to purchase or lease EVs only for the government fleet from
2025 onwards.
Navigating Electric Vehicles 2024 29
2.1.1. Indirect Policy for Promoting EVs
Promoting EVs can also be done in indirect ways, not through tax incentives or subsidies,
but through making the EV more useful. The practice of demarcating and marking Low
Emission Zones (LEZ), for example, is becoming more and more common over the past
few years, with over 300 cities in Europe already doing so and London and Milan being
prominent examples of this.
London introduced an Ultra-Low Emission Zone in 2021 and continues to expand the use
of this tool. Only vehicles with the lowest level of emissions can move in such an area
when a vehicle that does not meet the emission standard set by the municipality has to
pay a fee for entering the area that can reach up to 12.5 GBP. A similar move was made in
Milan when it banned the entry of polluting vehicles (according to their compliance with
the EU EURO emission regulations) from entering the city on weekdays or being subject to
a fine. The municipality of Milan has defined levels of pollution over time, and until 2030,
only the cleanest vehicles will be able to move on its territory.
In France, the government requires the adoption of the LEZ (Low Emission Zones) practice
in all municipalities with more than 150,000 inhabitants as of 2024. Spain requires LEZ
zones in all cities with more than 50,000 inhabitants (more than 70% of the cities in
Spain), and in the Netherlands, such zones exist in Amsterdam and Utrecht, also here, with
the goal of achieving emission-free transportation in these cities by 2030.
Low-emission or Zero-emission zones give an EV that does not emit pollutants an
advantage and thus make it more useful since it can also be driven within them. It is more
profitable since it is not fined and does not have to pay to enter the zone.
Since January 2019, the “Clean Air Zone” program has been operating in Haifa, under which
the entry of polluting commercial vehicles (EURO 4 standard and below) into residential
areas of the city is prohibited. Initially, the regulation referred to vehicles with a diesel
engine weighing over 3.5 tons, but it was later extended to light commercial vehicles as
well. The reduced emissions zone in Haifa includes all residential areas in the city, but at
this stage, entry to the Carmel tunnels, the bay factory areas, and the port from the east
is permitted. A polluting vehicle caught driving in the clean air zone is fined.
A similar initiative was taken in Jerusalem when in August 2021 a municipal by-law came
into effect prohibiting the entry of polluting vehicles into the city limits with the exception
of Begin Road and Highway 1. A polluting vehicle is defined as a commercial vehicle with
a diesel engine manufactured until 2005 without a particulate filter (EURO 4 standard).
2.1.2 Decreasing Levels of Support, Subsidies and Incentives
The initial stages in the development of the EV market were characterized by subsidies
and tax incentives, but as these markets develop and mature, government support on the
demand side changes.
In Norway, for example, the country with the highest EV penetration rate, an exemption
from VAT was initially granted to EVs. Still, in 2023, the government decided to require
30
VAT on electric vehicles whose price is more than 500,000 kroner ($52,000) and reduce
additional tax incentives.
In the UK, a grant was given for the purchase of an EV, the value of which decreased between
2016 and 2021 until the end of EV subsidies in 2022 after the target of a 20% market share
was reached. Subsidies still exist for taxis, commercial vehicles, and electric trucks.
In Sweden, an incentive was given for the purchase of an EV that reached a peak of
70,000 kroner ($7,000) in 2022, but this benefit expired in November of that year.
France took a slightly different approach, where there was also a reduction in incentives
(from $7,400 in 2021 to $5,300 in 2023), but unlike other countries, the benefit also
depends on household income, with low-income households receiving a higher incentive.
In many other countries, including Israel, a gradual decrease in financial incentives and tax
benefits for EVs can be seen in recent years, the most prominent example perhaps being
Germany, which announced the end of support for the purchase of EVs as early as 2024.
2.1.3 Policy for Supporting the Supply Chain
Contrary to the first stages of EV adoption, where most of the benefits and tax incentives
concerned encouraging demand, quite a few policy statements announced over the past
few years refer to the development and production of EVs, batteries, and components
for EVs as well as the deployment of charging infrastructures. A decade ago, laws
and regulations were enacted in China (the world’s largest EV market) to encourage
manufacturers of vehicles and components for EVs and to support local production. Unlike
many other countries, in China, it is also possible to identify involvement at the regional
and municipal level, and some provinces have even set their own goals, such as Chongqing
province, which has set itself the goal of producing about 10% of the new energy vehicles
(NEV) in China by 2025, or the Jilin province which aims to reach a production capacity
of about one million vehicles per year by 2025. Other countries have recently published
plans to encourage local production, such as India, Indonesia, Ethiopia, and Morocco.
The last few years have greatly emphasized the dependence on critical minerals in the
transition to electric propulsion. Countries and governments are looking for ways to
strengthen their position in the supply chain while emphasizing local production, ethics,
and sustainability in the new supply chains.
2.1.4 Support for Charging Infrastructure Deployment
In markets that have reached maturity, the benefits, incentives, and support intended for
the penetration and increase of the market share of EVs are now increasingly directed
to support the deployment of charging infrastructures. In many countries, the EV market
share is already very significant, and at the same time, only a wide deployment of charging
infrastructures will allow convenient and simple use of EVs and help reach the emission
targets aimed by governments and countries.
In the UK, for example, the government announced in June 2022 its intention to reduce
Navigating Electric Vehicles 2024 31
the subsidy program for EVs and concentrate on charging. It has allocated around £1.6
billion ($2.1 billion) to support an EV charging strategy with the construction of 300,000
public charging stations by 2030.
Similarly, the Chinese government also identified the charging infrastructure as a burning
issue and introduced a subsidy program to quickly deploy a wide charging network. In
the city of Shenzhen, for example, the goal is to reach 43,000 fast charging stations
and 790,000 slow charging stations by 2025. Germany, which canceled subsidies for EVs,
increased the budget for the establishment of charging stations as part of its Climate
Action, and similar trends can also be seen in Switzerland, Finland, Denmark, Poland, and
other countries.
The US has allocated over 1.5 billion dollars to build a network of charging stations as part
of the NEVI program (National Electric Vehicle Infrastructure Formula Program). The goal
is to build such a network along the roads of North America so that eventually, about
500,000 charging stations will be installed, with the distance between each other not
exceeding 80 Km by the year 2030. The support for charging infrastructure also exists
within the framework of the IRA law, according to which the installation of a charging
station can result in a tax credit of up to $100,000 for a public charging station or $1,000
for a private customer purchasing a home charging point.
In the EU, the AFIR (Alternative Fuel Infrastructure Regulation) replaced the 2014 directive,
and as of March 2023, the European Council and the European Parliament have agreed to
implement it, including requirements regarding the coverage of the TEN-T (Trans-European
Network Transport) road network, which will be invested in at about 15 billion euros.
2.1.5 Setting ZE Goals by OEMs
Similarly to governments and countries, car manufacturers have also declared and
continue to declare in recent years the goals they set for the production and sale of EVs
and reducing the average emissions in their fleet. Some of the manufacturers formulate
the goals in terms of sales, sales shares, and even turning the entire fleet electric.
These goals are, in many cases, ahead of the regulatory requirements and the governmental
ambitions. Although these goals may not be legally binding, they can certainly be seen as
a statement and a manifestation of the auto industry’s intentions toward a full transition
to electric propulsion.
The most ambitious goals are those of European car companies, and this is following
the EU’s intentions to reach ZE by 2035. The car companies back up their statements
with investment commitments, when 7 of the largest companies in the world, which are
responsible for selling about half of the passenger vehicles, have spent over 55 billion dollars
on new car technologies, including the construction of factories since 2019. According to
the IEA data, between the years 2019-2022, the R&D expenses and the CAPEX (Absolute
Capital Expenditures) expenses of the VW group reached about 16 billion dollars, Ford 10
billion, Toyota about 8 billion, GM about 6 billion, Stellantis 5.5 billion and Mercedes almost
five billion dollars.
32
Here are some examples of the goals OEMs have set for themselves:
Ford 600,000 BEVs by 2026
GM Production of EVs only by 2033
Toyota Introducing ten new EV models and selling 1.5 million BEVs by 2026
Nissan 44% of sales BEVs by 2026, 55% by 2030
Mitsubishi 50% EV sales by 2030 and 100% by 2035
BMW 30% of sales EVs by 2025 and 50% by 2030
Honda 30 EV models by 2030 with production of about two million units per year
Porsche 80% of sales EVs by 2030
Mercedes 50% of sales EVs by 2030
Other manufacturers have gone one step further, such as the Chinese BYD, which since
March 2022 has been producing EVs only.
2.2 Legislation in the USA
The American IRA (Inflation Reduction Act) passed in August 2022 includes a variety of
tax benefits and financing programs to create a clean energy economy. Part of the law
directly refers to the adoption of EVs with a dedicated budget taken from a total budget
of 369 billion dollars for investment in climate change.
Along with incentives for the purchase of EVs, this law also includes reference to the supply
side with tax incentives for the production of EVs as part of the Advanced Manufacturing
Production Tax Credits. The US government provides subsidies for local production of
batteries for EVs of up to $35 per kWh and an additional $10 per kWh in the assembly of
vehicle modules. Assuming that the average cost for a battery is around $150 per kWh,
these incentives can lead to a decrease of about a third in the total price of the battery.
Another relevant law is the Clean Vehicle Tax Credit, which came into force in 2023 and
sets a series of conditions that entitle an EV to tax incentives. The law states that the
final assembly of the vehicle must take place on US soil, that the vehicle must have a
battery with a capacity of at least 7kWh or more, the total weight of the vehicle must
be less than 6.35 tons, and the price of the vehicle to the consumer must be lower than
$50,000 or $80,000 In the case of vans, recreational vehicles or vans, in order to be
eligible for the tax relief of $7,500 (and an additional $7,500 if the vehicle meets certain
conditions regarding the battery and other components in the vehicle), the household
that purchases it needs an annual income below the threshold set by the US Internal
Revenue Service.
A critical requirement related to encouraging local production and reducing dependence
on external suppliers is the Critical Mineral Requirement, according to which at least 40% of
the value of the critical minerals present in the vehicle battery (lithium, nickel, magnesium,
Navigating Electric Vehicles 2024 33
graphite, and cobalt) must come from the US or be processed or recycled in the USA or
in countries that have a free trade agreement with the USA. The percentage required in
2023 was 40%, which is supposed to increase by 10% every year until the beginning of