This article was published by the International Energy Agency on Dec. 21, 2021.
As the global economy has recovered strongly this year, car sales have rebounded too. Globally, they are set to grow by 4 per cent in 2021, according to the auto industry tracker MarkLines, reaching close to 80 million and making up part of the huge drop they experienced in 2020 due to the Covid-19 pandemic.
In particular, electric car sales have continued to show their resilience to volatility in the wider car market. In a few key car markets – such as Germany (above 34 per cent), the United Kingdom (28 per cent), France (over 23 per cent) and China (18 per cent) – the market share of electric cars reached record levels as of late November(1). To date, around 34 countries have announced policies that set a future deadline for banning new registrations of internal combustion engine (ICE) cars. This has been accompanied by announcements from automakers such as Ford, Volkswagen and General Motors of plans to phase out ICE cars from their production lines. Yet, even if global electric car sales in 2021 end up meeting the most optimistic expectations, SUV sales are still set to be five times higher.
Global SUV sales have proven very resilient throughout the pandemic, growing by over 10 per cent between 2020 and 2021. In 2021, SUVs are on course to account for more than 45 per cent of global car sales – setting a new record in terms of both volume and market share. The growth of SUVs continues to be robust in several countries, including the United States, India and across Europe. In some other countries, such as China, the growth of SUVs is stagnating, mainly driven by the big rise of small battery-powered electric cars.
What’s still needed: Higher ambition, strong implementation, clear tracking
The increasing number of electric SUV models released in 2021 means that SUVs are electrifying faster than in previous years. In 2021, around 55 per cent of the electric car models on the market were SUVs, up from 45 per cent two years ago. For the first time ever, the electrification ratio of SUVs matches the electrification ratio of non-SUV cars. In both the United States and the European Union, e-SUVs are expected to account for more than 55 per cent of all electric car sales in 2021. By contrast, the majority of electric car sales globally in 2021 were still non-SUVs, driven especially by preferences for smaller cars among Chinese consumers. For example, mini electrified models made their appearance in China with a price of less than 10,000 USD.
However, the large majority – over 98 per cent – of SUVs on the world’s roads today still rely on internal combustion engines. SUVs are also heavier and consume around 20 per cent more energy than a medium-sized car. The global fleet of SUVs has increased rapidly, from less than 50 million in 2010 to around 320 million in 2021 – equivalent to the total car fleet of Europe. As such, SUVs rank among the top causes of energy-related carbon dioxide (CO2) emissions growth over the last decade. In 2021 alone, the global fleet of SUVs increased by over 35 million, driving up annual emissions by 120 million tonnes of CO2.
SUVs rank among the top causes of energy-related carbon dioxide emissions growth over the last decade
If SUVs were an individual country, they would rank sixth in the world for absolute emissions in 2021, emitting over 900 million tonnes of CO2. To offset the growth in global emissions since 2010 due to the increase in the number of SUVs, the world’s electric car fleet would need to have expanded to become twice as large as it is today. The good news is that skyrocketing electric car sales in 2021 are expected to be just about sufficient to cancel out the additional emissions stemming from the 35 million SUVs that were purchased instead of average-sized cars.
To mitigate emissions from SUVs, the policy framework should focus on constraining their rise. Policies should support a quicker shift towards electric vehicles while also providing incentives for the early replacement of SUVs that run on petrol or diesel. The average size of vehicles in the car fleet is something that policy makers need to keep a close eye on. Apart from consuming more energy, larger cars drive up demand for critical minerals because battery-powered electric SUVs are equipped with a much larger battery (70 kilowatt-hours) than the average battery electric car (around 50 kilowatt-hours). Some governments have already started introducing relevant measures, such as France and Germany, which have put a tax on large and high-emissions cars like SUVs. Additional policies targeting SUVs will help to deliver a sustainable and low-carbon road passenger sector.
(This analysis was supported by the work of IEA Energy Analyst Leonardo Paoli)