electric vehicles market

The Bloomberg New Energy Finance (BNEF) issued a report tracking developments within the global electric vehicles market.The whitepaper Electric Vehicle Outlook 2017 provides a breakdown of trends expected to take centre stage in the global electric vehicles market between 2017 and 2040.

The whitepaper highlights the impacts of the EV market on the transportation and energy sectors.

According to the BNEF, the five factors driving the global EV market include:

  • Short term regulatory support in key markets including the US, Europe and in China.
  • Decreases in the cost of lithium-ion batteries.
  • Increased EV commitments from automakers.
  • Growing consumer acceptance, driven by competitively priced EVs across all vehicle classes
  • The growing role of car sharing, ride hailing and autonomous driving

Trends within the global electric vehicles market

BNEF projects that by 2040, 54% of new car sales and 33% of global car fleet will be electric. However, EV sales between now and 2025 are expected to remain relatively low. Significant increases are expected between 2025 and 2030 as EV costs will be more affordable without the need for government subsidies.

The majority of global economies will experience mass adoption of EVs as from 2029.

According to the study, the number of light duty electric vehicle fleets will exceed 1.4 million by 2030 and reach 1.6 million by 2040. In total, the number of EVs on the road by 2040 is expected to reach 530 million by 2040.

China, the US and Europe are expected to dominate the sector as the three regions will hold 60% of the global EV market in 2040 due to increased regulatory support.

Europe is expected to witness approximately 5% short-term EV sales penetration by 2021 from 2.5% by the end of 2017. By 2040, the region will experience approximately 70% long-term EV sales penetration.

Battery electric vehicles are forecasted to lead the EV market ahead of the plug-in hybrid vehicles (PHEV) due to the engineering complexity and high costs associated with PHEVs. However, PHEVs are expected to be dominant in the Japanese EV segment 2030 onwards.

The total energy storage capacity of lithium-ion battery packs installed in EVs is expected to reach 1,300GWh in 2030 from 21GW in 2016. At the same time, electricity consumption from EVs will rise to 1,800TWh in 2040 from 6TWh in 2016.

BNEF says to meet energy demand from EVs, utilities and regulators will need to meet peak demand from EV charging through increased implementation and monitoring of demand response and time of use of tariffs. [BNEF issues 2017 New Energy Outlook].

Energy storage in facilities of EV owners will also play a leading role in ensuring utilities are able to meet peak demand resulting from charging of EVs.

Although the adoption of EVs has grown over the past five years, the unavailability of adequate charging infrastructure is hindering the market growth. Over a longer period of time, lack of home charging will restrict the global electric vehicles market to reach 100%.