- The IEA has predicted that EVs will displace oil-based transport in the coming years.
- However, this will depend on the fulfilment of electromobility pledges around the world.
- In Africa, the electric vehicle market was valued at $11.94 billion in 2021 and is projected to reach $21.39 billion by 2027.
The International Energy Agency (IEA) has said that electric vehicles (EVs) will displace oil in the coming years. The agency stated this in its 2023 Global Electric Vehicle Outlook report.
According to the IEA, Oil displacement increases from 0.7 million barrels per day (mb/d) in 2022 to nearly 6 mb/d in 2030 if pledges supporting electromobility in road transport around the world are fulfilled.
In the report, the IEA advocates for widespread EV adoption as it will reduce air pollution and greenhouse gas (GHG) emissions, which should reduce health and environmental damage and their associated societal costs.
Also, distance-based charges that vary by time, place and vehicle type, could reduce traffic congestion, noise and road infrastructure damage.
The IEA sees the world’s growing electric vehicle stock reducing oil use, which today accounts for over 90% of total final consumption in the transport sector.
The IEA report also stated that in 2022, the transition to electric vehicle stock displaced around $11 billion in gasoline and diesel tax revenues globally.
At the same time, the use of EVs generated around $2 billion in electricity tax revenue, meaning there was a net loss of around $9 billion.
However, the IEA notes that recent price volatility for critical minerals that are important inputs to battery manufacturing, and market tension affecting supply chains, are a stark reminder that in the transition to electromobility, energy security considerations evolve and require regular reconsideration.
The IEA advises governments to anticipate a reduction in fuel tax revenues as electric vehicle adoption grows in their respective countries and develop new tax strategies to maintain revenue levels without discouraging the adoption of EVs.
The African context
According to the IEA report, the 2022 best-selling electric car model in Africa was the Hyundai Kona electric car. The car is on sale in African countries like Nigeria, South Africa, Uganda, Morocco and Kenya.
The Hyundai Kona electric car can charge to full capacity within 9 hours, 35 minutes and run for up to 482 km. It is powered by a 64.0 kWh battery.
Meanwhile, other brands are currently flooding the African electric vehicle market. In Nigeria, Oando Clean Energy Limited recently announced that it had taken delivery of some mass transit buses made by the world’s largest electric vehicle manufacturer, China-based Yutong.
Both companies partnered to roll out over 12,000 electric buses over the next seven years in Lagos state.
Mordor Intelligence data suggests that Africa’s electric vehicle market was valued at $11.94 billion in 2021 and is projected to reach $21.39 billion by 2027. However, the market has constraints such as a lack of charging infrastructure, which may hamper the market growth.
What you should know
According to the IEA report, in 2022, the world’s largest carmakers in terms of Internal Combustion Engine (ICE) car sales from Volkswagen, General Motors, Toyota, Stellantis, Honda, Renault-Nissan-Mitsubishi, Ford, Hyundai-Kia, Geely, Mercedes-Benz and BMW, accounted for 40% of global electric car sales.
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