The likes of VW, Daimler, Volvo and Nissan have made aggressive plans to electrify their vehicles over the next 10 years and shift into the post-internal combustion era. And China is pushing the hardest here, with the market’s 2025 auto plan calling for EVs to contribute all vehicle sales growth over the next seven years
“China is doing this not just to reduce oil imports and improve urban air quality, but also for industrial policy reasons,” explains Colin McKerracher, head of advanced transport at Bloomberg New Energy Finance. “As the vehicle mix shifts, China wants to position its domestic automakers to leapfrog established international brands.”
He adds, “A thriving, globally competitive auto sector is a major source of employment, investment and innovation. Nobody wants to see their national champions left behind.”
Bloomberg expects much of the world’s vehicle sales to be electric by 2040, with Europe, China and the US the largest markets. Some countries are forging ahead – Norwegian sales are already above 40% and the government is looking to fully to phase out traditional vehicle sales by 2025.
Bloomberg forecasts 530 million electric vehicles on the world’s roads in 2040, one-third of the total fleet. This would displace around 8 million barrels per day of oil demand, and increase global electricity demand by around 5%.
“The power system can accommodate the additional demand, but smart-charging systems will be needed to ensure vehicles are not contributing to demand during peak periods,” warns McKerracher.