E-vehicles to be 35% of sales by 2040 thanks to falling battery prices

BNEF has published a study based on the total cost of owning a car or van, which shows that e-vehicles will probably not account for more than 5% of the total global market up to 2020, but in the decade up to 2030 a lot of technical improvements will take place which will cause them to gain sufficient advantage over petrol and diesel cars. It estimates annual sales of 41 million e-vehicles by 2040, or 35% of all new car and van sales. (In 2015 e-vehicle sales were 462,000.)

The biggest technological advance BNEF expects is in car batteries. The study forecasts lithium-ion batteries will cost less than $120 per KWh by 2030, about one-third of the current cost, which means e-vehicles will become cheaper than internal combustion engine vehicles – even without subsidies – by the mid-2020s. It assumes an oil price of between $50 and $70 per barrel, and that a battery-powered car with a 60 KWh battery will travel 320km between charges.

The environmental impact will depend on what generates the electricity. BNEF estimates the move to e-vehicles will save about 13 million barrels of oil per day. That will be replaced by 1,900 TWh of electricity, amounting to 8% of global electricity demand by today’s numbers. Therefore, the split in the sources of electricity will be crucial to determining the extent to which e-vehicles reduce climate-changing emissions – the more renewable sources, the more emissions can be reduced.