'Aggressive adoption' will see EVs account for majority of new cars sales by 2040
As France announces an outright ban on the sales of petrol and diesel cars by 2040, new analysis from Bloomberg New Energy Finance (BNEF) has found that electric vehicles (EVs) will account for more than half of new car sales by the time the French ban is enforced.
BNEF has updated its predictions on the rise of EVs in the automotive market, with this year’s analysis finding that “the EV revolution is going to hit the car market even harder and faster” than similar predictions last year.
According to last year’s predictions, EVs were set to represent 35% of all new car sales by 2040. New research suggests that the number will actually surge to 54% by 2040. The increase will be driven by a “momentous inflection point” during the 2020s, BNEF notes.
“We see a momentous inflection point for the global auto industry in the second half of the 2020s,” BNEF’s lead advanced transport analyst Colin McKerracher said. “Consumers will find that upfront selling prices for EVs are comparable or lower than those for average ICE vehicles in almost all big markets by 2029.”
EVs will make up the majority of all new car sales by 2040 and will account for 33% of light-duty vehicles on the road, the BNEF research found. The predictions are based on future reductions in price for lithium-ion batteries and varying cost components in EVs and internal combustion engine vehicles.
The research also factors numerous commitments from automakers to introduce EVs into portfolios. Most recently, Volvo pledged to introduce an all-electric portfolio by 2019.
EV sales reached record heights in 2016, with 700,000 sold worldwide. BNEF predicts that by 2021 the figure will reach 3 million, while 5% of light-duty vehicles will be electric versions, up from 1% today. In the second-half of the 2020s, BNEF predicts that EVs will be cheaper on a lifetime-cost basis that traditional vehicles.
Growth will be facilitated by “remarkable” cost declines in battery prices, which have already plunged 73% per kWh since 2010. Manufacturing improvements at a large-scale – such as the world’s biggest lithium ion battery developed by Tesla in South Australia – will help to double battery energy density by 2030, leading to further cost reductions of 70%.
However, the research suggests that infrastructure will also have to keep up with the pace of the EV revolution. EV charging in areas such as London has already been criticised by the likes of Uber, although Japanese carmaker Nissan predicts that there will be more EV charging points than petrol stations in the UK within the next four years.
BNEF’s senior analyst for the transport team Salim Morsy said: “There is a credible path forward for strong EV growth, but much more investment in charging infrastructure is needed globally. The inability to charge at home in many local and regional markets is part of the reason why we forecast EVs making up just over a third of the global car fleet in 2040, and not a much higher figure.”
The research team also covered other transformative technologies in the transport sector, notably autonomous vehicles and ride sharing. While the research suggests that autonomous driving will be limited over the next 10 years, it will be a shared application in 80% of all EVs by 2040.
BNEF named Norway, the UK and France as nations expected to lead the uptake in EVs through to 2040. It appears that France is taking this leadership seriously, after Emmanuel Macron’s government announced France will stop selling petrol and diesel vehicles by 2040.
The country’s new ecology minister and environmental campaigner Nicolas Hulot revealed that the decision was issued to improve public health policy as “a way to fight against air pollution”. French motorists already have to display different coloured Crit’Air ‘clean stickers’ on their vehicles, so that authorities can easily determine which vehicles – the most polluting – will be banned from entering low-emission zones.
The other named leaders also have ambitions in motion. Norway accounts for the highest percentage of purchased EVs globally, and has a target in place to only sell all-electric or plug-in hybrid vehicles by 2025.
In the UK, the Government has backed an overarching plan for all new cars and vans to be zero-emission by 2040 with various funding streams, although questions have arisen as to the speed of implementation, in light of ongoing air quality discrepancies.