As countries seek to achieve net-zero emissions, electric vehicles (EVs) are emerging as one of the key levers for decarbonizing road transport. According to the Commitments Scenario Announced by the International Energy Agency (IEA), increasing the stock of EVs from 17 million currently to 231 million in 2030 and 808 million in 2040 will reduce transport emissions by 6% by 2030 and 36% by 2040. Decarbonization of transport is aided by parallel decarbonization of the power sector, whose emissions would reduce by 21% by 2030 and 56% by 2040 due to the increasing adoption of renewable energy. Part of the power system's flexibility to integrate more renewables will come from the EVs themselves. Integrating EVs into the energy system so that they contribute to the cost-efficient decarbonization of the energy sector will be necessary as EVs become more common in emerging economies.
Growing Adoption of EVs in Emerging Economies
While most EV adoption is observed in the United States, Europe and the People's Republic of China (hereinafter “China”), an increasing number of them are penetrating the markets of emerging economies, with unique diffusion patterns. Electric two- and three-wheeled vehicles are most common in Asia, with electric tricycle sales accounting for 46% of total tricycle sales in fiscal 2022. Meanwhile, electric buses are gaining ground in Latin America, where most have reached cost parity with diesel buses. These trends will likely continue as these economies set more adoption targets by the end of the decade.
Opportunities to Decarbonize Through Appropriate Measures
Since emissions are also present in the manufacturing and disposal phases of EVs, ensuring that operational emissions from EVs approach zero, if not negative, helps deepen the decarbonization of the transportation sector. The electricity used to charge EVs plays an important role, and life cycle analysis shows that the emission reduction impact of switching to EVs is more positive if the average emissions intensity of the electricity used to charge them is less than 800 grams (g) carbon dioxide equivalent (CO₂-eq) per kilowatt-hour (kWh) (if larger internal combustion [ICE] cars are replaced by equivalently sized EVs) or less than 450 g CO₂-eq /kWh (if smaller ICE cars are replaced).
Challenges in Emissions-Intensive Economies
While certain Latin American countries already have relatively less emission-intensive energy sectors due to the abundance of hydropower, several Asian and African countries have highly emission-intensive sectors due to their dependence on unmitigated fossil fuels. Increasing the capacity and consumption of low-carbon generation such as solar and wind is therefore necessary to reduce operational emissions from the upcoming EV fleet.
The combination of increasing adoption of electric vehicles, the development of clean energy sources and the implementation of smart charging measures promises to pave the way for the decarbonization of transport in emerging economies. With these actions, these nations are positioning themselves to achieve their ambitious net-zero emissions goals and significantly contribute to combating global climate change.
