The global sale of zero-emission cars is forecast to increase from 4 percent of the market in 2020 to 70 percent by 2040.
Leaders like China, the U.S. and European economies run far ahead of these numbers, but lower levels of adoption in emerging economies reduce the global average. The equivalent for buses sees their zero-emission sales rise to 83 percent by 2040.
Zero-emission light commercial vehicles grow from 1 percent today to 60 percent of their market over the same time period, and medium and heavy commercial vehicles to just over 30 percent, from almost zero now, BloombergNEF’s (BNEF) latest annual Electric Vehicle Outlook (EVO) said.
“There are over 1.2 billion combustion cars on the road and the fleet turns over slowly. Reaching net zero by mid-century will require all hands on deck, particularly for trucks and other heavy commercial vehicles where the transition has barely started,” Colin McKerracher, head of the advanced transport team at BNEF, said.
The Net Zero Scenario (NZS) for the road transport sector shows that zero-emission passenger cars, for instance, would have to hit almost 60 percent of sales in their segment globally by 2030, not 34 percent as they do in the Economic Transition Scenario – that’s 55 million EVs sold in that year, as opposed to 32 million.
2030 is only two model-refresh cycles away for automakers, so policy certainty will be needed very soon to make investments for a higher rate of penetration possible. This is particularly true for countries that do not already have tightening vehicle CO2 emissions or fuel economy standards.
Nikolas Soulopoulos, commercial transport team lead at BNEF, said: “In addition to introducing tighter fuel economy or CO2 standards for trucks, governments may need to consider mandates for the decarbonization of fleets. They should also consider incentives to push freight into smaller trucks, which can electrify faster than larger ones.”
It estimates that electric vehicles represent a $7 trillion global market opportunity between today and 2030, and $46 trillion between now and 2050, under the Economic Transition Scenario.
The charging network needs to grow to over 309 million chargers across all locations by 2040. Home chargers alone would have to reach 270 million, public chargers 24 million, workplace chargers 12 million and bus and truck chargers 4 million. To install all of these would require over $589 billion of cumulative investment in the next two decades.
The electricity used to charge electric vehicles on the road would add 9 percent to demand by 2040 in the Economic Transition Scenario. Most of the extra demand for electricity globally in the decades ahead will be met by building additional renewable energy capacity, according to BNEF forecasts.
Lithium-ion battery demand from EVs is set to rise sharply, from the current 269 gigawatt-hours in 2021 to 2.6 terawatt-hours per year by 2030 and 4.5TWh by 2035. Demand under the Economic Transition Scenario for battery metals, such as lithium itself, cobalt, nickel and manganese, will also soar.
Under the Net Zero Scenario, all the numbers above would have to be much larger. For chargers, $939 billion would be required in investment by 2040 to install 504 million units. For electricity demand, that scenario would take the extra megawatt-hours needed to 14 percent by 2040 and to just over 25 percent by 2050. For the electric vehicles themselves, the total market opportunity reaches $80 trillion cumulatively by 2050.