EVs get in gear
There will be a faster take-up of emission-free road vehicles than forecast as the cost of building cars rapidly declines. And electric cars are set outsell fossil-fuel powered vehicles within two decades as battery prices plummet, turning the global auto industry upside down, while also signalling economic turmoil for oil-exporting countries, according to the Electric Vehicle Outlook report from Bloomberg New Energy Finance.
This shift will see plug-in cars accounting for one-third of the global auto fleet by 2040, displacing some 8 million barrels a day of oil production.
“This is economics – pure and simple economics,” says BNEF’s lead advanced-transportation analyst Colin McKerracher. “Lithium-ion battery prices are going to come down sooner and faster than most other people expect.”
Lithium-ion cell costs have already slipped 73% since 2010 and further battery manufacturer innovation will mean more steep declines in average prices over the next two decades. That could mean suppliers getting squeezed as they compete for contracts.
“There’s an element of competitive dynamics and a real possibility of oversupply in the lithium-ion battery market that will serve to hammer down prices,” McKerracher says.
BNEF also finds that:
• Within eight years, electric cars will be as cheap as petrol-driven vehicles, pushing the global fleet to 530 million vehicles by 2040
• Electricity consumption from EVs will grow to 1,800 terawatt-hours in 2040, from six terawatt-hours in 2016
• The world currently has around 90 gigawatt hours of EV lithium-ion battery manufacturing capacity online, and this is set to rise to 270 gigawatt hours by 2021.
• Charging infrastructure will continue to be an issue with bottlenecks capping growth in key Chinese, US and European markets emerging in the mid-2030s.