4 Projections for Electric Vehicles

NEW YORK -- Mark your calendar for 2025: That’s when electric vehicles (EVs) will become price competitive with internal-combustion-engine vehicles, unsupported by any subsidies, according to a new report.

Bloomberg New Energy Finance’s (BNEF's) Electric Vehicle Outlook 2017 puts a potential marker on the mass-market adoption of EVs and transformation of transportation and fuels. Here are four other projections for the EV market ...

Thanks to falling battery prices, EVs will become price competitive to all major light-duty vehicle segments before 2030, the report predicts.

“While EV sales to 2025 will remain relatively low, we expect an inflection point in adoption between 2025 and 2030, as EVs become economical on an unsubsidized total cost of ownership basis across mass-market vehicle classes,” it states.

By 2040, BNEF expects 54% of global new-car sales and 34% of the car fleet to be electric.

This growing EV fleet—reaching 530 million by 2040—will displace the equivalent of 8 million barrels of transportation fuel per day, the report estimates. According to the U.S. Energy Information Administration, the United States consumed an average of 9.33 million barrels per day (bpd) of gasoline in 2016.

As falling battery prices help stimulate the growth of the EV market, private and public charging infrastructure will struggle to keep up, BNEF predicts.

“Even when EVs have reached cost parity with internal-combustion-engine vehicles, lack of home charging will be a significant barrier to adoption and will restrict EV sales from reaching 100%,” the report states. “In our models, many countries that grab an early lead in EV adoption (China, the United States, parts of Europe) hit this ‘infrastructure cap’ in the mid-2030s and sales growth slows significantly.”

Autonomous vehicles—those that can operate without a person behind the wheel—will have only a limited effect on transportation over the next 10 years, BNEF predicts. However, after this point the technology’s influence will grow along with the quick adoption of ride-hailing (Uber, Lyft) and car-sharing services (ZipCar, Car2Go).

“We believe that autonomous vehicles will be primarily shared and will begin to replace existing human-driven shared and hailed cars starting in 2030,” the report states, adding that this will weigh on vehicle sales while increasing the average distance travelled per vehicle.

By 2040, 80% of shared autonomous vehicles will be electric because of the technology’s lower operating costs, the report estimates.

Click here to download BNEF’s 2017 Electric Vehicle Outlook.