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More than half of new car sales in the world will be electric vehicles (EVs) in 2040, with one-third of the global car fleet then consisting of electric cars, according to the Electric Vehicle Outlook 2018 by Bloomberg New Energy Finance (BNEF) out on Monday.
“In 2040, some 60 million EVs are projected to be sold, equivalent to 55% of the global light-duty vehicle market,” BNEF said, noting that as many as 559 million EVs will be on the road in 2040, equivalent to 33 percent of the global car fleet.
According to the outlook, sales of EVs will rise from 1.1 million worldwide in 2017 to 11 million in 2025. Sales of EVs are then forecast to soar to 30 million in 2030 “as they become cheaper to make than internal combustion engine (ICE) cars.”
China will be the key driver of this transition from gas guzzlers to EVs, with sales in China projected to account for nearly half of the global EV market in 2025 and for 39 percent in 2030, BNEF’s outlook finds.
China will also lead in terms of percentage adoption, with EVs accounting for 19 percent of all passenger vehicle sales in 2025, followed by Europe with 14 percent, and the U.S. with 11 percent.
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BNEF is optimistic on EVs demand, but it sees two major hurdles emerging in the coming years. One is a risk of cobalt shortages in the early 2020s that could slow the rapid battery cost decline, and the other is potential challenges to the proliferation of charging infrastructure.
Other highlights in the BNEF outlook include that the upfront cost of EVs “will become competitive on an unsubsidized basis starting in 2024. By 2029, most segments reach parity as battery prices continue to fall.” Buses go electric faster than passenger cars, and e-buses and cars combined are expected to displace a combined 7.3 million barrels per day of transportation fuel in 2040.
In the U.S.—which has been relatively slow to turn to EVs with battery-powered vehicles representing only 1.1 percent of new car sales in 2017—consumers will have the choice to select from 100 battery-powered vehicles by the end of 2022, compared to 38 as of end-2017, as many automakers are promising new models. The wider choice is expected to result in the doubling of EV sales to some 853,000 by 2022, or 5 percent of the U.S. light vehicle sales, according to the outlook.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.