Electric vehicle sales will take a decent hit from the global Covid-19 pandemic, a new report has warned, but will stay on track to account for more than half of all new passenger car sales globally by 2040, and nearly one-third of the world’s car fleet.
In its latest annual Long-Term Electric Vehicle Outlook, BloombergNEF, shows electric models accounting for 58% of new passenger car sales globally by 2040, and 31% of the whole global car fleet. In some countries, the share of EVs will be much, much more.
Electric vehicles will also make up 67% of all buses on the road by that year, 47% of two-wheelers, and 24% of light commercial vehicles, the report says.
But the transition will hit the brakes a bit this year, the report warns, with the coronavirus pandemic interrupting 10 successive years of strong growth to deliver a forecast 18% dip in electric passenger vehicle sales to a total of 1.7 million worldwide.
“The Covid-19 pandemic is set to cause a major downturn in global auto sales in 2020,” said BNEF’s head of advanced transport, Colin McKerracher.
“It is raising difficult questions about automakers’ priorities and their ability to fund the transition. The long-term trajectory has not changed, but the market will be bumpy for the next three years.”
But if Covid-19 is a bump in the road for electric vehicles, it’s no smooth ride for internal combustion engine vehicles, either, with ICE car sales set to take an even bigger hit than EVs and fall by 23% in 2020.
BNEF’s analysis suggests that global sales of internal combustion engine, or ICE cars – having peaked in 2017 – will continue their long-term decline after a temporary post-crisis recovery.
Electric models, meanwhile, remain on the up-and-up; they’re seen accounting for 3% of global car sales in 2020, rising to 7% in 2023, at some 5.4 million units.
“Further falls in lithium-ion battery prices will mean that the lifetime and upfront costs of an electric car ‘cross over’ with those of ICE equivalents in around 2025, on average,” the report says.
But it points out that the date will vary greatly depending on the market, ranging from as early as 2022 for large cars in Europe, out to 2030 or after for EVs in India and Japan.
Interestingly, BNEF also sees – for the first time in this report – a peak in overall new passenger vehicle sales by 2036, as changing global demographics, increasing urbanisation and more shared mobility outweigh the effects of economic development.
BNEF also takes its “closest look yet” at the prospects for electric vehicle charging infrastructure, and estimates the world will need around 290 million charging points by 2040, including 12 million in public places, requiring investment of around $500 billion.
The report estimates that home, workplace and private commercial charging will account for 78% of this investment, while investment in public charging infrastructure can be provided profitably by the private sector, with some government support needed in some regions.
All this adds up to worse news for global oil markets, with BNEF estimating that the electrification of transport has already taken out almost 1 million barrels of oil demand per day. By 2040, this will blow out to 17.6 million barrels per day.
For electricity markets, things move in the other direction, wit EVs of all types seen adding 5.2% to global electricity demand by 2040.
BNEF calculates that there are currently more than 7 million passenger EVs on the world’s roads, together with more than 500,000 e-buses, almost 400,000 electric delivery vans and trucks, and 184 million electric mopeds, scooters and motorcycles.