Electric vehicle capitals of the world: What markets are leading the transition to electric?

Published: 2017.11.08
By

Dale Hall, Hongyang Cui, Nic Lutsey

This briefing provides an update on the global electric vehicle capitals—that is, the cities leading the transition to electric drive with greater sales and sales shares than other markets. We identify 20 electric vehicle capitals: Beijing, Hangzhou, Qingdao, Shanghai, Shenzhen, Taiyuan, and Tianjin in China; Paris, France; Tokyo, Japan; Amsterdam, Rotterdam-The Hague, and Utrecht in the Netherlands; Oslo and Bergen in Norway; Stockholm, Sweden; Los Angeles, New York, San Francisco, and San Jose in the U.S.; and London, United Kingdom. Analyzing these markets at the metropolitan area level, we assess electric vehicle sales in these markets through 2016, identify innovative electric vehicle support policies in these markets, and compare their charging infrastructure.

Based on this synthesis of electric vehicle uptake data and the underlying support policies in place, we draw five summary reflections:

Just 20 cities account for about 40% of the world’s electric vehicles. These cities are each in their own way helping to overcome electric vehicle barriers, propelling the market forward, and leading by example. As shown in the figure below, these 20 electric vehicle capitals are responsible for 40% of global electric vehicle stock of about 2 million cumulative global passenger electric vehicles in 2016. These diverse cities, representing eight countries across Asia, Europe, and North America, accounted for 43% of electric vehicle sales in 2016.

Strong regulatory and fiscal policy has driven the early electric vehicle market. The markets with the highest electric vehicle uptake—in China, Europe, Japan, and the United States—are in regions with a combination of vehicle efficiency regulations, strong consumer incentives, and direct electric vehicle requirements. The U.S. markets especially are supported by the California Zero Emission Vehicle regulation. China has consistently applied strong fiscal incentives and has now adopted its New Energy Vehicle quota scheme. Many nations across Europe have spurred the market with some of the most generous incentives, and the European Union has had some of the more stringent CO2 standards.

Cities are developing innovative ways to support the electric vehicle market. Cities complement the national, provincial, and state actions with policies to fit the local conditions. Cities are electrifying municipal fleets, buses, car-sharing programs, and taxis. Top electric vehicle markets and associated local utilities are deploying public charging infrastructure, as well as indirectly promoting infrastructure by requiring that buildings and parking facilities be wired to support electric vehicles. Cities are providing preferential access for electric vehicles to parking, bus lanes, carpool lanes, and toll roads to steer the vehicle fleet toward electric. Some cities with the most pervasive air quality problems are beginning to authoritatively exercise their control over access to the city.

Accelerating the transition to electric requires a comprehensive suite of actions. Greater electric vehicle adoption faces barriers of model availability, cost, convenience, and consumer understanding. A portfolio of actions, offered by multiple players, is in place in all the leading markets. National policies spur electric vehicle investment, deployment, and availability. Consumer incentives ensure that electric vehicles are affordable in the near term, as their costs continue to drop. Governments and utilities are helping to build out the necessary charging infrastructure to ensure the convenience of electric vehicles is fully realized. Local policies especially are increasing awareness that electric vehicles are here today and offer substantial benefits to consumers.

Electric vehicle adoption and benefits have not yet reached most emerging markets. Although the transition to electric drive is taking hold in new markets, this market development is greatly disproportionate: The 20 leading markets with more than 40% of all electric vehicles account for just 3% of the global population and 8% of 2016 passenger vehicle sales. As electric vehicles become more affordable, emerging markets more broadly will need to adopt innovative policies that are tailored to their local conditions to see similar growth and benefits.