The electrification of road transport will move into top gear in the second half of the 2020s, thanks to tumbling battery costs and large-scale manufacturing, with sales of electric cars racing to 28%, and those of electric buses to 84%, of their respective global markets by 2030.
The latest long-term forecast from Bloomberg New Energy Finance (BNEF) shows the sales of electric vehicles (EVs) increasing from a record 1.1 million worldwide last year to 11 million in 2025, and then surging to 30 million in 2030 as they establish cost advantage over internal combustion engine (ICE) cars. China will lead this transition, with sales there accounting for almost 50% of the global EV market in 2025 and 39% in 2030.
The number of ICE vehicles sold per year (gasoline or diesel) is expected to start declining in the mid-2020s, as EVs bite hard into their market. In 2040, some 60 million EVs are projected to be sold, equivalent to 55% of the global light-duty vehicle market. ‘Shared mobility’ cars will be a small but growing element.
The advance of e-buses will be even more rapid than for electric cars, according to BNEF’s analysis. It shows electric buses in almost all charging configurations having a lower total cost of ownership than conventional municipal buses by 2019. There are already over 300,000 e-buses on the road in China, and electric models are on track to dominate the global market by the late 2020s.
Ashish Sethia, head of Research, Asia Pacific, BNEF said that India is often touted as the next big EV market, set to follow China’s lead. “But low average vehicle prices will inhibit EV uptake for the next 10 years. After 2030, we expect EV sales in India to accelerate with increased affordability, as well as the government’s efforts to ensure universal access to electricity,” he added.
BNEF expects the transition in transport to have major implications for electricity demand, and for the oil market. EVs and e-buses will use 2,000TWh in 2040, adding 6% to global electricity demand. Meanwhile, the switch from ICE to electric vehicles is forecast to displace 7.3 million barrels a day of transport fuel.
The pace of electrification in transport will vary by country, particularly over the next 12 years as some markets jump ahead of others. BNEF forecasts that in 2030, EVs will make up 44% of European light-duty vehicle sales, 41% of those in China, 34% in the US, and 17% in Japan. However, a shortage of charging infrastructure and a lack of affordable models will hold back the market in India, so that EVs will make up just 7% of new car sales in 2030 here.
