The electric vehicle (EV) boom is now expected to come five years earlier than originally anticipated, in 2033, according to new research.
Based on new Ernst & Young AI analysis for supply and demand, experts are suggesting that EV sales will surpass those of traditional vehicles by 2033, with Europe reaching this point in 2028, China by 2033, and the U.S. by 2036. The research suggests that non-EV sales could plummet to as low as 1 percent of total vehicle sales by 2045.
While Europe will be the first to achieve record EV sales, due to increasing vehicle demand China will likely lead the way through to 2050.
Pressure from governments across Europe and in China for companies to meet green policy expectations means increasing fees for car manufacturers buying and selling gasoline and diesel-powered vehicles. The goal of net-zero has spread around the globe, meaning many automakers are making the switch earlier than anticipated.
President Trump's withdrawal from the Paris Agreement, which was re-joined by the U.S. under President Biden in January, meant the easing of fuel regulations. While the U.S. will catch up with China and Europe's EV market, this will likely happen at a slightly later date.
"The regulatory environment from the Biden administration we view as a big contributor because he has ambitious targets," EY's global advanced manufacturing and mobility leader, Randy Miller, stated in an interview.
As several big car manufacturers jump on board the EV boom, we are seeing an increase in public interest in making the switch. The availability of reliable car brands now developing EV models is a shift from the Tesla-dominated market of previous years.
In addition, the millennial demographic that previously rejected car ownership for environmental reasons, as well as city living, has been influenced by the pandemic to move away from public transport and car-sharing. The potential for EV makers to tap into this environmentally-conscious market is significant.
Just as this research comes out, Volkswagen announces an expected record year for its EV sales. Relatively new to the market, VW sold almost half as many EVs as Tesla in 2020, a figure that is expected to rise substantially in 2021. WV sold 231,600 electric-powered vehicles in 2020, up from 73,600 the previous year.
Seeing the acceleration of the EV market, various cities and states around the world are now making the uptake of EVs easier through financial incentives, as governments encourage consumers to switch away from petroleum and diesel-powered cars.
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Just this week, major petroleum consumer India announced plans to subsidize EV purchases to encourage making the switch, putting the country's National Electric Mobility Plan into practice. The state of Gujarat will be giving subsidies to EV buyers and will exempt owners from vehicle registration fees.
The state's Chief Minister explained of the move, "The EV policy announced today will be in force for four years. We want to promote EV usage as well as promote Gujarat as a destination for the production of EVs. We are aiming to cut 600,000 tons of carbon emission… every year."
India is the fifth largest motor vehicle manufacturing country in the world, with the automotive industry contributing around 7.1 percent to India's GDP, meaning that the creation of hubs such as these could make it a global leader in EV production.
With the EV boom coming early, it appears that major automotive brands and states around the world are working hard to get ahead of the curve to ensure their stake in the ever-expanding EV market.
By Felicity Bradstock for Oilprice.com
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Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK. More
Comments
Based on an average annual growth rate of 10% during the last eleven years, the number of EVs will rise to from 10.9 million in 2020 to 28 million by 2030 or 1.22% of the total vehicles on the roads by then.
The ease of charging and also the availability of charging points are always on EV drivers’ minds particularly when they are embarking on a long journey of hundreds of miles. Therefore, it is not surprising that 18% of EV drivers and 20% of plug-in buyers in California are switching back to gasoline cars.
There will be a need for some 300 million charging points by 2040 needing estimated cumulative investment of over $589 billion in the next two decades.
This is one very major reason why EVs will never prevail over ICEs. The other is the need for global expansion of electricity generation costing trillions of dollars to be able to charge the supposedly millions of EVs that will be on the roads. How would this expansion be sourced: solar, nuclear or hydrocarbon?
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
If we check the statistics of EV sales (there is some good websites that present these numbers) then we see the market of EV’s almost double every 2 years (exponential growth) or more then 40% growth a year. The number that will be sold this year will be more then 4 million.
I think investors should be aware and study these numbers to make the right decisions.