Electric vehicle sales appear likely to more than triple by 2025, and yet governments and manufacturers will have to work harder and likely sweeten incentives to eliminate emissions from road transportation by the middle of this century as pledged.
That’s according to research firm BloombergNEF in its seventh annual Long-Term Electric Vehicle Outlook, released Wednesday.
BNEF’s analysts declare EVs “a remarkable success story.”
Accordingly, they predicts global plug-in passenger vehicle sales will hit 20.6 million in 2025, much higher than a forecast for 14 million by that target year made just a year ago.
Global EV sales totaled 4.2 million units in 2021, up 108% versus 2020, and up 198% from 2019. Add in light-duty trucks and other commercial vehicles, and sales reached 6.75 million units last year.
In addition, there are over 280 million electric mopeds, scooters, motorcycles and three-wheelers on the road globally. That figure does not include e-bikes, which are showing their own market growth.
Demand grows as battery technology continues to improve, policy pressure toward “net zero” greenhouse gas emissions is rising in many countries, and automakers are ramping up manufacturing of new EV models that hit at different price targets.
But there’s one factor that’s particularly driving stronger demand: faster uptake in China.
Domestically, the U.S. road to full adoption is bumpier. Even with private sector enthusiasm, as Toyota
and others hope to challenge EV leader Tesla
by expanding the range of purchase price, replacing the 1.2 billion passenger vehicles that run on internal combustion engines
takes time. Government support persists through tax breaks but expanding these incentives has little footing in a tightly divided Congress and as surging gasoline prices rekindled the debate about U.S. fossil-fuel development.
Just over two-thirds of the global fleet will be zero-emission by 2050, even if no new policies or regulations are enacted, BNEF predicts.
The growth may be lauded by policy-makers backing the move, but it’s still shy of the full adoption that has been a repeat talking point by the Biden administration and others. As an interim step, Biden has said half of all U.S. vehicles on the road by 2030 can be zero-emissions.
For one thing, heavier commercial vehicles, including buses, delivery vans and trucks, are on track to trail, with only 29% of the fleet decarbonizing on the 2050 timeline, BNEF says.
That means despite the rapid rise in EV adoption, “road transport is still not on track for carbon neutrality by 2050,” analysts led by Colin McKerracher, BNEF’s head of advanced transport, write in the report.
“Aggressive action from policymakers will be required, especially on heavier vehicles where both batteries and hydrogen fuel cells are vying for a place in the market. The window to stay on track for net zero is closing quickly,” they said.
Full adoption may not happen as fast as aggressive forecasts indicate, but the salad days for traditional engines are long over. Worldwide sales of internal combustion engine vehicles peaked in 2017 and are now in permanent decline, according to BNEF. The global fleet of combustion cars on roads will start to shrink in 2024, and by the following year, deliveries will have dropped roughly 19% from their high point.
The report also highlights how governments can make the challenging transition to net-zero emissions easier by combatting car dependency. They might do this with spending on public-transport options and encouraging alternatives such as e-bikes, as well as supporting flexible work options that may reduce commutes.
If the amount of miles traveled by passenger vehicles and size of the fleet is just 11% lower than what BNEF is modeling for 2050, it would save 2.25 gigatons of cumulative CO2 emissions and reduce the strain on battery supply chains, the researchers said.