The International Energy Agency predicts that prices for smaller electric vehicles (EVs) in Europe and North America will drop to match those of combustion engine cars by the mid-2020s. This shift comes as EV sales globally are expected to increase by 35% this year to 14 million, representing 18% of the passenger car market, up from 4% in 2020.

The IEA’s energy technology policy head, Timar Guel, said that larger EVs like SUVs and pickups are likely to reach purchasing parity later, possibly in the 2030s.

The report highlights that China is a prominent player in the EV market, making up half of the electrified vehicles worldwide and 60% of EV sales in 2022. Governments globally are investing in EV expansion to address environmental concerns and decrease dependency on oil, and demand for oil is expected to decrease by 5 million barrels a day by 2030 as a result of the transition to EVs.

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