EVs to dominate car sales by 2040 – but more vehicles means emissions still rising
Electric vehicles (EVs) are likely to make up the majority of global sales of passenger cars and buses by 2040, according to Bloomberg New Energy Finance (BNEF)’s Electric Vehicle Outlook 2019.
Based on analysis of the evolving economics in different vehicle segments and geographical markets, the report shows EVs taking up 57% of global passenger car sales by 2040 – slightly higher than it forecast a year ago. Electric buses are set to hold 81% of municipal bus sales by the same date.
The main driver for vehicle electrification in the coming decades will be the continued reduction in EV battery costs, BNEF said. By the mid-to-late 2020s, EVs will be cheaper than their internal combustion engine counterparts in almost every market on the basis of both lifetime and upfront costs.
Since 2010, the average cost of lithium-ion batteries per kWh has fallen by 85% on a mixture of manufacturing economies of scale and technology improvements. The report also showed EVs taking 56% of light commercial vehicle sales in Europe, the US and China within the next two decades, plus 31% of the medium commercial market.
‘Electrification will still take time because the global fleet changes over slowly but, once it gets rolling in the 2020s, it starts to spread to many other areas of road transport,’ said Colin McKerracher, Head of Advanced Transport for BNEF. ‘We see a real possibility that global sales of conventional passenger cars have already passed their peak.’
Heavy trucks will likely prove to be the most difficult road transport vehicles to electrify, with their use limited to short-distance applications. However, BNEF predicted that heavy trucks on long-haul routes will also face other, non-electric competition – from alternatives using natural gas and hydrogen fuel cells.
The analysis also found that, by 2040, EV charging requirements will drive a 7% increase in global electricity consumption. The expansion of electrification will also drive a surge in EV lithium-ion battery demand from 151 GWh in 2019 to 1,750 GWh in 2030. New mining capacity for all battery materials will need to come online to avoid this causing a supply bottleneck.
Despite positive developments in the field of low-emission road transport, BNEF warned that the global on-the-road conventional passenger car fleet will grow in number until 2030. This means that road vehicle emissions will continue to rise for the next decade, followed then by a sharp fall in the years before 2040, which will return levels to those similar to today.