10 August 2017 2017 09:15 AM GMT

EV Revolution To Hit Global Auto Industry Even Harder And Faster Than Expected

Electric vehicles will make up the majority of new car sales worldwide by 2040, and account for 33% of all the light-duty vehicles on the road, according to new research published by Bloomberg New Energy Finance (BNEF). The forecast, put together by the advanced transport team at Bloomberg New Energy Finance, draws on detailed analysis of likely future reductions in price for lithium-ion batteries and of prospects for the other cost components in EVs and internal combustion engine, or ICE, vehicles. It also factors in the rising EV commitments from automakers and the number of new EV models they plan to launch.

The central finding of the research is that the EV revolution is going to hit the car market even harder and faster than BNEF predicted a year ago. The team now estimates that EVs will account for 54% of all new light-duty vehicle sales globally by 2040, not the 35% share it forecast previously. By 2040, EVs will be displacing 8 million barrels of transport fuel per day and adding 5% to global electricity consumption. Colin McKerracher, lead advanced transport analyst at BNEF, said: “We see a momentous inflexion point for the global auto industry in the second half of the 2020s. 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.”

The forecast shows EV sales worldwide growing steadily in the next few years, from the record 700,000 seen in 2016 to 3 million by 2021. At that point, they will account for nearly 5% of light-duty vehicle sales in Europe, up from a little over 1% now, and for around 4% in both the U.S. and China. However, the real take-off for EVs will happen from the second half of the 2020s when, first, electric cars become cheaper to own on a lifetime-cost basis than ICE models; and, second – arguably an even more important moment psychologically for buyers – when their upfront costs fall below those of conventional vehicles.

The key component of an EV – the battery – is set to plunge in price, building on recent, remarkable cost declines. Since 2010, lithium-ion battery prices have fallen 73% per kWh. Manufacturing improvements and more than a doubling in battery energy density are set to cause a further fall of more than 70% by 2030. The result will be rapidly rising market shares for electric vehicles in the biggest markets, even with oil prices staying low. BNEF sees them accounting for nearly 67% of new car sales in Europe by 2040, and for 58% in of sales in the U.S. and 51% in China by the same date. Countries that have made early progress in EV uptake are expected to be among the leaders in 2040, including Norway, France, and the U.K. Emerging economies such as India are forecast not to see significant EV sales until the late 2020s.

Jon Moore, chief executive of BNEF, said that that growth in EV market share “will come about during a time when the power system is also undergoing a revolution, towards cleaner, more distributed generation. This means that not only do EVs surge, but their emissions profile improves over time.” BNEF’s forecast is based squarely on the relative economics of EVs and ICE cars. It assumes that current policies to encourage EV take-up continue until their scheduled expiry, but does not assume the introduction of any fresh measures. BNEF analysed the auto market not just by country but also by segment, encompassing everything from small run-arounds to SUVs and large family cars.

Salim Morsy, senior analyst on BNEF’s advanced transport team and lead author of the report, commented: “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 team incorporated work into their EV forecast work on two other hot topics in the transport revolution – autonomous vehicles, and ride sharing. It concluded that the impact of autonomous driving will be limited in the next 10 years but will play an increasing role in the market after 2030, with 80% of all autonomous vehicles in shared applications being electric by 2040 due to lower operating costs.

An executive summary of BNEF’s 2017 electric vehicle forecast can be downloaded by the media from the microsite here.

Figure 1: Annual global light-duty vehicle sales

Source: Bloomberg New Energy Finance

 

Figure 2: Global light-duty vehicle fleet

Source: Bloomberg New Energy Finance

Bloomberg New Energy Finance (BNEF) is an industry research firm focused on helping energy professionals generate opportunities. With a team of 200 experts spread across six continents, BNEF provides independent analysis and insight, enabling decision-makers to navigate change in an evolving energy economy. Leveraging the most sophisticated new energy data sets in the world, BNEF synthesises proprietary data into astute narratives that frame the financial, economic and policy implications of emerging energy technologies. Bloomberg New Energy Finance is powered by Bloomberg’s global network of 19,000 employees in 192 locations, reporting 5,000 news stories a day.

January 10th 2018
US: Doubling Of Wind & Solar Capacity Possible By 2020 as Coal & Nuclear Drop

In the latest issue of its “Energy Infrastructure Update” (with data through November 30, 2017), the Federal Energy Regulatory Commission (FERC) notes that proposed net additions to generating capacity by utility-scale wind and solar could total 115,984 megawatts (MW) by December 2020 – effectively doubling their current installed capacity of 115,520 MW.  The numbers were released as FERC prepares for a January 10 meeting to consider U.S. Department of Energy Secretary Rick Perry’s proposal for a bailout of the coal and nuclear industries.

December 27th 2017
Rooftop PV Presents a $23 Billion Opportunity in India Over The Next 5 Years

India is accelerating development of renewable energy projects to provide cheap, reliable and clean power to its 1.3 billion people. The country’s per-capita on-grid electricity consumption has increased significantly over the four years; due to increased industrial activity, higher uptake of electrical appliances by residential electricity users and the addition of new consumers to the grid. During this period, the cost of electricity from rooftop PV has halved, due to fierce competition in the market and a drop in equipment prices. In contrast, average retail electricity rates have increased by 22% in the same period. This has made rooftop PV cheaper than commercial and industrial grid tariffs in all major states in India.

January 28th 2018
Masdar City To Test Latest Concepts In Autonomous Electric Vehicles

ICONIQ Motors, a China-based EV company, has reached agreement to test its autonomous driving concept at Masdar City. The ICONIQ SEVEN, one of the world’s latest EV models is a futuristic vehicle, built on an intelligent, connected vehicle platform integrated with Microsoft’s AZURE cloud technology; and is set to hit the market in 2019. “Masdar City has put smart and sustainable mobility at the centre of its strategy, as highlighted by the historic success of its flagship driverless Personal Rapid Transit (PRT) system,” said Yousef Baselaib, Executive Director of Sustainable Real Estate at Madsar. “It is the ideal location to test innovative autonomous driving concepts.”


 

   

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