LONDON (Reuters) - The number of electric vehicles on roads worldwide rose to a record high of 3.1 million in 2017, but more research, policies and incentives are needed to drive further uptake, the International Energy Agency (IEA) said.

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The number of electric cars, including battery-electric, plug-in hybrid electric and fuel cell electric passenger light-duty vehicles, increased by 57 percent compared with 2016, the IEA said in a report.

China accounted for 40 percent of the global total last year.

Research and development, policy support, charging infrastructure investment and production improvements are resulting in lower battery costs and higher electric vehicle (EV) uptake.

Battery costs, however, are still a major component of EV costs, so financial incentives such as rebates, tax breaks or exemptions will be needed to support electric car deployment.

“Dynamic market uptake of electric vehicles has occurred in recent years,” the IEA said in a report.

“Ongoing support and commitments for increased deployment of EVs from policy makers and the automotive industry suggest that this trend is not going to abate in the coming decade,” it added.

By 2030, the IEA estimates there will be 125 million EVs on the road, based on existing and announced policies. That could rise to 220 million if policies become more ambitious to meet global climate goals and other sustainability targets.

The shift to EVs will increase demand for some materials, especially cobalt and lithium used in lithium-ion batteries.

Cobalt demand is expected to be ten times higher than current levels by 2030 at 101 kilotonnes (kt) per year under current policies and could be as much as 25 times higher at 291 kt/year with more ambitious government policies, the IEA estimates.

Lithium demand is forecast to be 91 kt/year by 2030 based on current policies and 263 kt/year if more ambitious polices are implemented.

So far, rising numbers of EVs on the road have had a limited impact on electricity demand. In 2017, estimated global electricity demand from all EVs was 54 terrawatt hours, equivalent to slightly more than the power demand of Greece.

However, as electric vehicle uptake continues to rise their charging will increase electricity demand and impact transmission and distribution grids, the report said.