According to a new report by Bloomberg New Energy Finance, 58% of global passenger vehicle sales in 2040 will come from electric vehicles, yet they will make up less than 33% of all cars on the road.
While popular science fiction has set high the expectations of what the future of transportation will look like, BloombergNEF (BNEF) has painted a picture of how the auto industry will evolve in its latest Long-term Electric Vehicle Outlook report.
In the report, BNEF outlines that electric vehicles (EVs) will hit 10% of global passenger vehicle sales in 2025, with that number rising to 28% in 2030 and 58% in 2040. According to the study, EVs currently make up 3% of global car sales.
Beyond just new sales, EVs are predicted to represent 31% of all cars on the road in 2040, making up 67% of municipal buses, 47% of two-wheeled vehicles (scooters, mopeds, motorcycles and so on) and 24% of light commercial vehicles. Compare this to 2020, where EVs make up 33% of municipal buses, 30% of two-wheeled vehicles and 2% of light commercial vehicles.
In terms of gross vehicles usage, BNEF predicts that 500 million passenger EVs will be on the road globally by 2040, compared to a total passenger vehicle fleet of 1.6 billion. Unfortunately, there will still be more miles driven globally by internal combustion passenger vehicles than EVs.
Sales and price parity
The ramp in EV adoption will be initially led by reaching price parity with internal combustion engine vehicles. This will begin when large vehicles hit this point in Europe, which is expected to happen in 2022 and will end with small cars making the achievement in India and Japan around 2030.
While this parity takes a global perspective, it will be hard-driven by the European and Chinese markets, which are expected to represent 72% of all passenger EV sales in 2030. By 2030, China and Europe are expected to achieve the feat of 50% of all cars on the road being EVs.
This will be because of the other head of EV adoption, policy support, taking the form of European vehicle CO2 regulations and China’s EV credit system, fuel economy regulations and city policies restricting new internal combustion vehicle sales.
The rest of the pack
As for the United States, the country will be slower to reach the levels of adoption that are expected to come to Europe and China, due to limited projections of charging infrastructure availability. The U.S. does have one factor working in its favor to make a quick catchup possible by the end of the 2030s.
On a similar adoption rate projection to the United States comes South Korea. Like Europe and China, the South Korean adoption timeline is predicated upon strong government policy support, yet the country will also get a push from its domestic auto and battery manufacturers.
The report also outlines that there will be 550 EV models available from global auto manufacturers by 2022. Despite this prediction, Japan, home to a bevy of international vehicle manufacturers that already include a number of EVs, is predicted not to take off until 2025. The report states that this is when Japanese automakers launch more EV options, although the country home to Honda, Toyota, Mazda and Subaru still lags behind in EV adoption.
nearly 60% of U.S. households have two or more cars – and many have the ability to install home charging.