The electric vehicle (EV) market is undergoing a significant transformation, with EVs accounting for over a third of all car imports in value terms by the end of 2023. This radical shift is redefining the automotive industry and reshaping global trade in transport equipment.
In recent years, there has been a marked increase in sales of various types of EVs, including hybrid electric vehicles (HEV), plug-in hybrid electric vehicles (PHEV), and battery electric vehicles (BEV). However, these were not separately considered in trade statistics until 2017 when the World Customs Organization implemented an amendment to the Harmonized System (HS) for traded goods. This introduced new categories to differentiate between traditional internal combustion engine (ICE) vehicles and their electrified alternatives.
Before this amendment, the HS classified passenger vehicles based on their passenger capacity and the type and size of their internal combustion engine. The classification of hybrids and plug-in hybrids was complicated due to their combination of an internal combustion engine and an electric motor used for propulsion. In some economies, certain cars were classified together with traditional ICE vehicles, making it impossible to derive internationally comparable statistics.
The 2017 amendment resolved these issues by creating subcategories for vehicles with exclusively an internal combustion gasoline engine, diesel- or semi-diesel-engines, and those equipped solely with electric motors for propulsion. Consequently, the international community now has detailed trade statistics that allow monitoring of various types of EVs.
Import data from 2017 to 2023 show a dramatic shift towards EVs. Initially, hybrid, plug-in hybrid, and battery electric vehicles represented a modest fraction of total car imports by value. However, trade in EVs has grown significantly since then.
By the end of 2023, EVs accounted for more than a third of all car imports in value terms. Despite a slowdown in growth rate in 2023, the pronounced upward trend for EVs, particularly battery EVs, signifies a substantial change in demand and suggests the future direction of the global automotive industry.
By 2023, the United States was the leading global importer of EVs. Imports of EVs also grew considerably in some European countries and in the Republic of Korea. In particular, Belgium, the Netherlands, Sweden, and Switzerland have reached a tipping point where the import value of electric cars has overtaken that of traditional ICE vehicles.
In 2023, China became the leading exporter of passenger vehicles overall, with over 5.4 million units exported. Of these, roughly a third were EVs. It exported over 1.5 million battery EVs, meaning that one out of every four battery EVs exported in 2023 originated in China.
Some WTO members use most-favoured-nation (MFN) tariffs as a tool to expedite the availability of EVs but often differentiate by the type of EV. The data suggest that one in three WTO members allow battery EVs to be imported duty-free while hybrids and plug-in hybrid receive duty-free treatment in one out of four WTO members.
This tariff structure suggests that some WTO members are orienting policies to promote the adoption of battery and hybrid EVs over ICE cars. Other members do not differentiate in their tariff treatment and may instead be using other types of policies such as subsidies or technical regulations to promote such adoption.