New BNEF analysis finds that EVs will be cheaper than ICE cars by 2027

A new analysis by Bloomberg New Energy Finance, commissioned by Transport and Environment (T&E), finds that electric cars and vans will be cheaper to make than combustion engine cars in every light vehicle segment from 2027 at the latest across Europe.

The research also found that if lawmakers across the EU introduce measures such as strong support for charging infrastructure and strict vehicle CO2 targets, the region could reach 100% of new sales being battery electric vehicles by 2035. T&E called for the establishment of a hard deadline for the end of combustion engine sales in 2035, and tightened emissions targets in the short term.

T&E emphasised that an early build-up of EV production is vital to reudcing transport greenhouse gas emissions in the short term, in the EU. Electric vans only account for 2% of total van sales in the EU, for instance, due to weak emissions standards that fail to “stimulate manufacturers to invest iin their supply”. T&E suggested the usage of specific quotas for e-vans.

Julia Poliscanova, senior director for vehicles and emobility at T&E, said: “EVs will be a reality for all new buyers within six years. They will be cheaper than combustion engines for everyone, from the man with a van in Berlin to the family living in the Romanian countryside. Electric vehicles are not only better for the climate and Europe’s industrial leadership, but for the economy too.”

Without any further intervention, electric cars will only reach an 85% market share and e-vans only 83% by 2035, which would result in the EU overshooting its target to reach net zero emissions by 2050. This is due to the long time it takes for new sales to filter through into the stock of existing vehicles.

Norway currently leads Europe, with the highest share of EV sales 76.4% (including plug-in hybdid vehicles) in 2020. Italy lags at 4.2% in 2020, but that is significantly higher than Australia, which is at around 1%.

Recently, the state of Victoria in Australia announced a plan to subsidise the purchase of electric vehicles and introduced a target of 50% new sales of electric vehicles by 2030. However, the state has also received criticism for introducing road user charging on new electric vehicles, which will act as a disincentive for the purchase of zero emisisons cars.

Australia’s federal government recently released a ‘Future Fuels Strategy’, which was also criticised for not doing enough on EVs. The government’s projections suggest Australia will reach only 26% of new sales by 2030, far behind all of the European countries in this BNEF analysis.

See also: By 2030, it won’t make sense to own a petrol or diesel car