Transportation sector is a leading category to achieve net-zero global CO2 emissions. Since vehicles have long lives, investments made today will take some time to covert into emissions reductions. However, a recent analysis highlights that EV Investment surpasses renewables globally. This seems like a positive step ahead.

EV Investment Surpasses Renewables Globally

In 2023, investments made in the electric vehicle sector were more than the renewable energy sector. Electric transport investments include spending on charging infrastructure and EVs. The sector took over renewable energy to become the largest sector to spend $634 billion in 2023. This was around 36% more than the previous year.

The transportation sector is a leading net-zero of global carbon dioxide emissions, and, because of the long lives of vehicles, investment decisions today will take a while to translate into emissions reductions.

China Leading the EV Market

Among other nations, China spent more on energy transition in 2023 but less than what it invested in 2022. China is aiming for 90% EV sales by 2030, which is three times more than today. With growing markets with S-curve trajectory China plans to hit 80% of market share by 2030.

More EVs were sold in China in 2023 than the rest of the world combined. China is dominating the market of EV production, batteries along with other components. This fact leads to reduced battery cost and makes EV adoption easier all over the world.

Highlights – How EV Investment Surpasses Renewables

  • Energy transition investment was around $1.77 trillion in 2023, that was 17% more than 2022.
  • Spendings on EV was around $634 billion, which was 36% more from a year prior. It covers vehicle purchase amount and money spent on building factories and charging infrastructure.
  • The amount includes different types of electric vehicles: commercial, two-wheelers, buses, trucks, and light cars, including others too.
  • Around $623 billion was spent on global renewable energy, which is 8% more than the previous year.
  • Global spending on electric transport needs to be tripled than the current level by 2030. Then only it would be possible to achieve the target of net-zero by mid-century.
  • According to the report, this sector needs more than $1.8 trillion which is more than the sum of almost all the categories’ investment made in 2023.
  • Combined total of investments from the European Union, United States and United Kingdom crosses the mark set by China.

Country-wise Investment

  • China remained the world leader when energy transition investment is considered by investing $676 billion. However, it was 11% less than the prior year.
  • The United States holds second place with an investment of $303 billion that is 22% more than the prior year. As per the report, early implementation of the Inflation Reduction Act helped with the growth.
Global Electric Transport Investment Surpasses Renewables
Pic Credits: BloombergNEF

Director of modeling, monitoring and evaluation for the International Council on Clean Transportation, Joshua Miller said, “Considering only policies adopted to date, the road transport sector is not yet on a pathway compatible with limiting warming to 2 degrees Celsius.”

Here, Joshua Miller is referring to the level of rising temperature about which scientists have already issued warnings.

Here is the list of Georgia EV Incentives and License Plate Rules: 2023-2025

Investments in Other Renewable Energy Sectors – 2023

  • $76.7 billion spent on offshore wind, that is 79% more than the previous year.
  • $20.4 billion in hydrogen, making it triple than the prior year. This is a milestone because 5 years ago this sector witnessed almost zero investments.
  • $926 by China, 5.7 billion by the European Union, and $2.8 by the USA in carbon capture. It was nearly double the amount of investments done in this sector a few years ago.
  • Around $84 billion was raised in 2023 through climate-tech equity raising.
  • There was a sharp decline in clean transport sector funding from $47 billion in 2022 to $18 billion in 2023.
2023 vs 2022 energy transition transmission
Pic Credits: BloombergNEF

Present Scenario

Currently, we are far away from setting the world on track of net-zero by mid-century. This is because of the insufficient investments made in clean energy technologies. On average, $4.8 trillion should be invested per year from 2024 to 2030.

According to the Energy Transition Investment Trends 2024, global clean energy supply chain production for energy technologies increased to $135 billion in 2023. This includes battery metals and equipment factories. This is a new record as in 2020 it was only $46 billion. Based on the currently announced investment plans, this figure tends to rise to $259 by 2025.

Clean energy supply chain investment by sector
Pic Credits: BloombergNEF

Types of Funding in Energy Transition Investments

The Energy Transition Investment Trends 2024 report tracks two different types of funding.

1. Climate-tech equity raising: It is equity raised by companies focusing on energy transition and climate. Due to rising interest rates, companies find it harder to raise capital. Thus, this has fallen since the past 2 years, as they raised only $168 billion in 2021 and $127 billion in 2022.

Clean energy-focused companies raised $49 billion in 2023, which is equity in comparison to other sectors in 2023. Transport was the 2nd largest funding sector followed by buildings, agriculture, and climate and carbon.

Climate type equity financing
Pic Credits: BloombergNEF

2. Energy transition debt issuance: This is a type of debt issued by governments and companies to fund the energy transition. In 2023, it was around $824 billion. It dropped around 10% in 2022 but in 2023 it marked a 4% increase.

For energy transition, utility companies raised the most debt $328. After that comes financial institutions with $176 billion and governments with $141 billion. There was a fall in debt raised by oil and gas companies, from $17.5 billion in 2022 to $8.3 billion in 2023.

EVs in 2030 – Predicting the Future of Green Transportation

Yes, electric vehicles are cheaper to own in Europe and China even when operation and purchase costs are accounted for. It is expected that US will also soon acquire the same between 2024-2025. EV investment surpasses renewables globally and will do so more in upcoming years if their purchase price is set accordingly.

Did You Know: In China, the lifetime cost of small EVs are cheaper than their fossil fuel counterparts.

RMI Analysis

Oil demand in the near future is under risk as EVs are expected to surpass 2/3rd of global car sales by 2030, according to a new analysis by RMI.

The new analysis by RMI in partnership with the Bezos Earth Fund highlights the possibility of global EV sales to surpass the net-zero timelines. It is also expected to account for more than 2/3rd of the market share by 2030.

As per this research, combustion car sales peaked in 2017 but by mid-decade more cars will be scraped than sold. Their free-fall is highly anticipated by 2030.

Systems Change Lab Analysis

India and later adopting countries are catching up at faster rates than the global average, according to separate analysis by Systems Change Lab. According to this analysis, countries like China, Norway, and the Netherlands have shown the possibility of growing EV sales to meet climate goals.

Following this, other countries are showing a similar pattern of growth in EV sales with 1% of total car sales being electric vehicles.

EEIST Research Project

EU and China are selling EVs at lesser prices than petrol and diesel cars in medium and small-sized car segments, according to a new EEIST research project.

Battery powered cars are expected to cross the 2nd tipping point as their price gets lower than a petrol or diesel car. This is expected to take place in Europe by 2024, China by 2025, US in 2026, and India by 2027, according to EEIST analysis.

India’s all-electric vehicle sales have tripled in 1 year going from 0.4% to 1.5%. If EVs are affordable, it will result in more purchases, as per the new research by Exeter University’s Economics of Energy Innovation and System Transition (EEIST) project.

Find out more about EV Tax Credit Calculator and Benefits in India.

This purchase parity tipping point is expected to be adopted in Europe by 2024, China by 2025, in the US by 2026, and in India by 2027 (for medium-sized cars, and sooner for smaller vehicles).

The EEIST project research mentions US, EU, and China should be coordinating international action and aligning regulatory trajectory. This will speed up the purchase price parity tipping point by 3 years. Moreover, all new car sales could help achieve the net-zero emission target by 2035.

This would enable faster transition on a global scale as these 3 large markets have a global impact. Together they account for 60% of the global car market.

Climate Champions Report

According to a report by Climate Champions, global EV sales are predicted to increase by 2030, with new vehicle sales ranging between 62% and 86%. Following an S-curve trajectory, China and Norther Europe had already established leading EV markets. Following the same, global market sales could increase at least 6 fold by 2030, which is presently around 40%.

Cross-Reference: EVs to surpass two-thirds of global car sales by 2030

Accelerating to Zero Coalition (A2Z)

Under Accelerating to Zero Coalition, more than 220 signatories have signed to the zero emission vehicle (ZEV) declaration. This includes 12% of countries representing global van and car market, as they also commit to 100% ZEV sales by 2035 in leading markets and by 2040 global markets. Investment decisions and transition is accelerated by the 100 corporate members of EV100.

Falling Oil Demands

  • EV expansions are reducing oil demands. According to the forecasts by RMI, this would eliminate the expected oil demand for cars.
  • Internal combustion cars account for approx. 1 quarter of global oil demand.
  • Broader road transport accounts for half of the quarter.
  • 2019 marks the peak year in oil demand for cars.
  • Oil demand for cars is expected to fall around 1 million barrels per day (mbpd) annually after 2030.
  • Economies are overtaking policy incentives to accelerate EV sales with reduced battery costs to enhance the shift.
  • Battery price in this decade are expected to fall by halve, approx. from $151 per kWh to $60-$90 per kWh.
  • With falling costs, EVs will be as cost-effective to buyers and sellers as petrol cars, globally.
EV investment surpasses renewables globally
Pic Credits: BloombergNEF

With lower vehicle prices, transition towards electric transport system can be made easy and quick. But for this, more investments are needed in this sector to provide better raw materials at cheap prices. So, based on the present scenario and pattern we can say EV investment surpasses renewables globally.

Source: Energy Transition Investment Trends 2024


Olivia is committed to green energy and works to help ensure our planet's long-term habitability. She takes part in environmental conservation by recycling and avoiding single-use plastic.

Leave A Reply