35% of global new cars sales by 2040 will be electric vehicles

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Electric cars' mass-market adoption could start in 2022

Bloomberg New Energy Finance (BNEF) predicts the unsubsidized total cost of ownership of battery electric vehicles falling below that of an internal combustion engine vehicle in 2022. It's the projection of a bright business perspective for an evolving electric cars mass-market.

The complex research and forecast started with a customer-focused, simple thought: Currently, electric vehicles (EV) are too expensive for the technology to go mainstream. The battery pack of a 2015 EV can account for about 30% of the cost for the entire car. BNEF anticipates significant price reductions for the batteries, enabling a mass-market lift-off for EV at competitive retail prices compared to gas-powered.

Falling battery cost and recovered prices for crude oil

BNEF lead advanced transportation analyst, Colin McKerracher, is quoted with significant numbers: "Lithium-ion battery costs have already dropped by 65% since 2010, reaching $350/kWh last year [2015]. We expect EV battery costs to be well below $120/kWh by 2030, and to fall further after that as new chemistries come in." Another basic assumption of BNEF is the recovering of the crude oil prices. They suggest the crude oil price recovering on $50/barrel during this period, and on to $70/barrel by 2040.

The Bloomberg researches regard the Tesla 3 and the Chevrolet Bolt as an important first generation of battery EV offering a mainstream-compatible mid-price and a long-range performance. According to the BNEF analysis and projections, long-range electric cars will cost less than $22,000 by 2040, and 35% of new cars worldwide will have a plug. BNEF knows, that these projections are made against the background of ongoing governmental subsidiaries supporting the EV industry and the need to develop a widespread charging infrastructure throughout the target market's countries.

Revolution or not – it's a reminder

No matter, if it will be a "revolution" or a constant change from 1% EV (U.S. new cars sales) to perhaps 35% worldwide, the research is a reminder. The BNEF report highlights the increased need of extended efforts supporting our customers to meet the challenging requirements caused by electric mobility like innovative application development, part weight reduction, or cost-competitive processing.

If you would like to know more, click the link below and read the Bloomberg Business feature "Here’s How Electric Cars Will Cause the Next Oil Crisis" online.