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Based on analysis of the evolving economics in different vehicle segments and geographical markets, BNEF’s Electric Vehicle Outlook 2019 shows EVs taking up 57 percent of global passenger car sales by 2040, slightly higher than it forecast a year ago.
Electric buses are set to hold 81% of municipal bus sales by the same date. For the first time, BNEF has, however, also incorporated in its forecast detailed work on the commercial vehicle market.
Their projections show electric models taking 56 percent of light commercial vehicle sales in Europe, the US and China within the next two decades, plus 31 percent of the medium commercial vehicle (MCV) market.
Heavy trucks will prove the hardest segment for electrics to crack, with sales of the latter limited to 19% in 2040. Their use case will mostly be in shorter-distance applications.
However, conventional heavy trucks on long-haul routes will also face other, non-electric competition from alternatives such as natural gas and hydrogen fuel cells.
“Our conclusions are stark for fossil fuel use in road transport,” says BNEF advanced transport head Colin McKerracher.
“Electrification will still take time because the global fleet changes over slowly but, once it gets rolling in the 2020s, it starts to spread to many other areas of road transport. We see a real possibility that global sales of conventional passenger cars have already passed their peak.”
Meanwhile, the role of shared mobility services such as ride-hailing and car-sharing will be important in this evolving picture.
These services account for less than 5 percent of all passenger miles travelled globally at the moment, but this is set to rise to 19 percent by 2040. The BNEF team does not expect autonomous driving to have an impact on global transport and energy patterns until the 2030s.
“There are now over a billion users of shared mobility services such as ride-hailing globally. These services will continue to grow and gradually reduce demand for private vehicle ownership.”
The main driver for the electrification trend over the next 20 years will be further sharp reductions in EV battery costs, thereby making electric cars cheaper than internal combustion engine (ICE) alternatives by the mid-to-late 2020s in almost every market, on the basis of both lifetime costs and upfront costs.
Since 2010, the average cost of lithium-ion batteries per kilowatt-hour has fallen by 85 percent on a mixture of manufacturing economies-of-scale and technology improvements.
The oil, electricity and battery industries will all be impacted by the rise of EVs. A year ago, BNEF estimated their impact on road fuel demand at 7.3-million barrels a day by 2040.
However, it has now nearly doubled this to 13.7-million barrels a day, partly because of new forecasts for electrification of the commercial vehicle sector and partly, paradoxically, because ICE fuel efficiency is expected to proceed more slowly than previously thought.
BNEF estimates that EVs will add 6.8% to global electricity consumption in 2040, and that they will drive a surge in EV lithium-ion battery demand from 151 GWh in 2019, to 1 748 GWh in 2030.
Despite the radical changes afoot, the outlook for road transport emissions remains far from rosy. The BNEF team sees the size of the global on-the-road conventional passenger car fleet continuing to grow until 2030.
This means that road vehicle emissions will continue to rise for the next decade, followed by a sharp fall in the years before 2040, which will only return them to levels similar to 2018.