Electric Vehicle Outlook 2019
Introduction
The way people and goods move is set to change dramatically over the next two decades, driven by a combination of policy, technology, economics, demographics and changing consumer preferences.
The Electric Vehicle Outlook is our annual long-term forecast of how electrification and shared mobility will impact road transport from now to 2040. The report draws on our team of specialists around the world and also looks at how these trends will affect electricity demand, oil use and demand for battery materials.
This year's forecast includes new analysis on how shared mobility will impact vehicle sales patterns, on the long-term demand for freight, and on how electrification will play out in the commercial vehicle market. We have also included our latest analysis on the outlook for battery prices and battery chemistry.
Colin McKerracher, Head of Advanced Transport, BloombergNEF
Global passenger EV sales outlook
Over 2 million electric vehicles were sold in 2018, up from just a few thousand in 2010, and there is no sign of slowing down. We expect annual passenger EV sales to rise to 10 million in 2025, 28 million in 2030 and 56 million by 2040.
By 2040, we expect 57% of all passenger vehicle sales, and over 30% of the global passenger vehicle fleet, will be electric.
Electric Vehicle Outlook 2019, BloombergNEF
Sales of internal combustion passenger vehicles have already peaked, and may never recover unless EV growth falters, or major economies such as China invest in significant stimulus programs.
What is driving this rapid uptake?
Battery prices keep falling. As a result, we expect price parity between EVs and internal combustion vehicles (ICE) by the mid-2020s in most segments, though there is wide variation between geographies and vehicle segments.
Emissions regulations are getting tighter, both at the city level and the national level and automakers are responding with a surge of new EV models launching in the next 5 years.
The fleet view
Despite the rapid growth in sales, there are over a billion vehicles on the road and EVs are still less than 0.5% of the global vehicle fleet. Changing this over will take time. The total passenger vehicle fleet continues to rise to 1.68 billion
vehicles in 2040, driven mostly by demand in emerging economies. This is lower than many other forecasters, as we see ride-hailing, car-sharing urbanisation, demographics and – eventually – autonomy, cut deeper into vehicle demand growth, particularly in the 2030s.
By 2040 we expect 500 million passenger EVs on the road and over 40 million commercial EVs. The internal combustion passenger vehicle fleet continues to grow until 2030 before declining.
Electrification is spreading to other vehicle segments
While much of the attention to date has been on passenger vehicles, as battery technology continues to improve and more models become available, electrification will spread to other segments of road transport.
In this year’s report we did new, detailed analysis on the relative economics of different drivetrain technologies for light, medium and heavy commercial vehicles. Each of these vehicle classes operates in different duty cycles depending on the application.
The electrification of the global bus fleet is already well underway with over 400,000 electric buses on the road. Commercial electric van and truck sales are set to accelerate in the 2020s.
By 2040, we expect 56% of light commercial vehicle sales and 31% of medium commercial vehicles in China, the U.S. and Europe to be electric.
Electric Vehicle Outlook 2019, BloombergNEF
Long-haul, heavy duty trucks will be harder to electrify; there, natural gas and hydrogen fuel cells will also play a role.
We also did new analysis on the long-term demand for freight this year, and the types of vehicles used to deliver this. Freight demand growth slows over the next 20 years and a higher share of freight moves to smaller vehicles due to urbanization, city restrictions, and economics. The rise of e-commerce also contributes to this trend.
Regional view
China
To understand where the global EV market is going, you need to understand where China is going. Due to its aggressive policy-supported push at both the national and regional levels, China continues to lead on EVs in all segments in our forecast.
China accounts for 48% of the passenger EV sales market in 2025, 34% in 2030 and 26% in 2040.
Electric Vehicle Outlook 2019, BloombergNEF
Europe
Europe quickly pulls ahead of the U.S. as the number two EV market in the 2020s, driven by tightening fuel economy regulations and growing commitments from domestic automakers.
APAC
India and other emerging economies go electric much slower, leading to a globally fragmented auto market. In markets like India and South East Asia, two- and three-wheeled vehicles are more attractive targets for electrification in the short term. Japan, South Korea and Australia all see significant adoption of EVs by 2040 with EVs representing 63%, 52%, and 61% of passenger vehicle sales respectively.
For more on understanding China’s EV market, watch our BNEF Summit talk
The rise of shared mobility
Will shared mobility and autonomous driving accelerate EV adoption?
Today, shared mobility services – taxis, ride-hailing and car-sharing – account for less than 5% of total distance traveled annually by passenger vehicles. But the use of these services is rising quickly; over a billion people globally now use some form of ride-hailing app. These services will continue to grow and gradually reduce demand for private vehicle ownership. By 2040, we expect the contribution from shared mobility services to rise to 19% of total kilometers traveled by passenger vehicles.
Shared mobility services will adopt EVs faster than private owners, due to more attractive economics. Today, EVs account for 1.8% of the shared mobility fleet. By 2040, we expect EVs to account for 80% of the shared mobility fleet.
Despite the current hype, autonomous vehicles do not have a meaningful impact on global transport and energy patterns until the 2030s.
Battery markets and charging infrastructure
Charging Infrastructure
Charging infrastructure remains a challenge in our forecast. There are already 630,000 public charging points installed globally, and utilities, oil and gas companies, automakers and pure-play operators are currently all active in this area. But much more will be needed to serve the growing EV fleet.
A patchwork of solutions is emerging to improve the public charging experience, such as ultra-fast chargers (150kW+, and up to 350kW in some cases), wireless charging, battery swapping, and new roaming agreements between charging operators.
But none of these make EVs fully competitive with internal combustion vehicles for consumers without access to home or workplace charging. Buyers with access to home charging will adopt EVs at a much faster rate than those without. Many of the most interesting questions over the next 10 and 20 years will be how to address buyers in the latter group.
If, through technology innovation and government policy, EV charging barriers are significantly lowered, adoption could be faster in the 2030s. In this year’s outlook, we have included the cost of a home charger for buyers of battery electric vehicles in our up-front and total cost of ownership calculations for electric vehicles. The added costs push adoption back very slightly, but do not change the overall trajectory.
BNEF's EV Charging Data Tool
Our EV Charging Infrastructure Data Tool (BNEF clients can access the tool here) provides a detailed database of installed public charging points at a country-level. Our research team gathers detailed data from governments, charging network operators and industry websites, and updates the tool every six months. The data includes details on the speed of charger and the operator of the asset.
Batteries
Annual lithium-ion battery demand for EVs grows rapidly in our forecast, passing 1,748 GWh annually by 2030. The supply chain is beginning to react to this expected increase in cell and material demand.
While there may be short-term fluctuations, we continue to expect further decreases in battery prices, falling from $176/kWh at the pack level today to $87/kWh in 2025 and $62/kWh in 2030.
Other important battery trends:
• Battery cell manufacturing capacity will pass 1TWh by 2025, based on current announced capacity plans.
• China will continue to drive the global battery market in terms of manufacturing capacity, with Europe forming the second largest manufacturing region.
• High nickel battery chemistries take a growing share of the market over the next 10 years.
• Lithium supply looks sufficient out until at least the mid-2020s, but new cobalt and nickel mining capacity will need to come online to meet growing demand.
• Solid-state batteries are still a decade away from use in mass-produced vehicles, but steady advances in the current family of lithium-ion batteries will bring continued improvements in energy density.
Build and pressure-test your own models with BNEF's Battery Pricing & Supply Chain tools:
BNEF's annual Battery Price Survey tracks the price of a lithium-ion battery pack across the past ten years, and draws on more than 70 data points from companies active across the lithium-ion battery value chain.
BNEF's Supply Chain Tools are interactive data tools that allows users to track lithium-ion battery cell and component manufacturing plants around the world, and customise the data for use in their own modelling. The tools also allows you to track current and projected supply/demand for battery metals, and to see the sensitivity of battery prices to changes in the underlying metal prices.
Implications
How will electric vehicles and shared mobility impact
demand for electricity and oil, and what does it mean
for carbon dioxide emissions?
In this section we highlight the impacts of our vehicle forecasts on oil demand, electricity demand and emissions.
Privately-owned passenger EVs, shared EVs, commercial electric vehicles and e-buses displace a combined 13.7 million barrels per day (MMbd) of oil demand by 2040.
This is up significantly from our 2018 forecast due to higher expected miles traveled, lower assumed internal combustion vehicle efficiency, a growing role of shared mobility and the inclusion of commercial vehicles in our forecast.
Passenger vehicles
We expect the global motorization rate to increase, but EVs coupled with fuel economy improvements and shared mobility services will lead to a reduction in oil demand for passenger road transport. Kilometers travelled go electric faster than the fleet in our forecast due to high-utilization shared vehicles.
Passenger vehicle oil demand peaks in 2028 and commercial vehicle oil demand peaks in 2035.
Electric Vehicle Outlook 2019, BloombergNEF
Commercial vehicles
We expect demand for road freight to increase but for growth in fuel demand to be curtailed by increasing fuel economy standards for trucks in major markets. The role of alternative drivetrains – electric, natural gas and hydrogen – is set to rise, but long-haul heavy-duty trucking in particular drives oil demand growth between now and 2040.
Electricity demand
Electricity demand from all types of EVs rises from 74TWh in 2019 to 2,333TWh in 2040. While this may sound high, EVs only add 6.8% to total global electricity consumption in 2040. Some countries will be much higher; EVs add 14% to total electricity consumption in Germany 2040, 11% in the U.S and 7.5% in China.
Coordinated charging and time of use pricing will be needed to prevent localized grid capacity constraints, but overall the power market can integrate this additional demand.
Our New Energy Outlook will be published in June and looks in more depth at the role that EVs will play in the power system.
Emissions
Despite the rapid uptake of electric vehicles across many different vehicle segments, direct CO2 emissions from road transport continue rising for the next 10 years before peaking in 2030, mainly due to a growing internal combustion vehicle fleet. If additional power sector emissions from generation are added, the peak is 2-3 years later.
By 2040, direct emissions from passenger cars, commercial vehicles and buses have returned to similar levels as in 2018. If national governments want to hit the aggressive emissions reductions targets they have set, a stronger policy push will be needed to accelerate adoption.
Comparing EV Outlooks
How does our report compare?
Our 2019 passenger EV outlook is similar to last year. At a high level, our forecast for when EVs reach price parity with ICEs in different segments is similar to last year and we still expect infrastructure hurdles to slow down adoption in the 2030s in most countries. However, due to a less optimistic view on new car sales and a more aggressive view on the growth of shared mobility services, our total passenger vehicle fleet size forecast is lower compared to last year.
As a result, we now expect there to be 508 million passenger EVs on the road globally by 2040 (slightly less than the 559 million we forecasted last year). Including commercial EVs, this brings our 2040 EV fleet size forecast to about 550 million.
Compared to other major organizations, BloombergNEF continues to hold the most aggressive view on EV adoption. Still, the views of other groups are changing quickly. Most oil majors have increased their long-term EV outlook at least once over the past three years, for example, and industry consensus regarding the potential growth opportunity for EVs is growing.
Among oil majors, Total, BP, and OPEC hold the most aggressive EV adoption forecasts. Total expects EVs to account for 50% of passenger vehicle sales and 32% of the total fleet by 2040. BP and OPEC, meanwhile, both expect there to be around 300 million passenger EVs on the road in 2040. Equinor, which takes a scenario-based approach to forecasting, says EVs could account for anywhere from 15-55% of passenger vehicle sales in 2030. ExxonMobil has a
more conservative outlook, but the company has consistently increased its EV forecasts in recent years and now expects a 2040 EV fleet size of over 150 million.
The Electric Vehicle Outlook is our annual long-term forecast of how electrification and shared mobility will impact road transport from now to 2040. The report draws on our team of specialists around the world and also looks at how these trends will affect electricity demand, oil use and demand for battery materials.
What’s new in the 2019 EV Outlook?
This year’s forecast includes new analysis on how shared mobility will impact vehicle sales patterns, on the long-term demand for freight, and on how electrification will play out in the commercial vehicle market. We have also included our latest analysis on the outlook for battery prices and battery chemistry. As well as:
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A more detailed view of the impact that autonomy, ride-hailing and sharing will have on the overall car market, including a new overall vehicle-demand forecast.
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An updated EV cost model that includes the cost of a home EV charger to more accurately reflect the costs individuals face to go electric.
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An updated e-bus forecast taking into account 2018 sales, urbanization forecasts and manufacturing capacity.
A more detailed view of oil displacement by market and refined products.
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Updated lithium-ion battery price and chemistry forecast based on our most recent market survey. We have developed a battery chemistry forecast for each of the new segments covered in this year’s report.
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Update on metals availability for batteries based on our supply/demand forecast for key metals including cobalt, lithium and nickel.
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Finally, we have re-run our consumer adoption bass-diffusion model using the most recent EV sales data and vehicle pricing. The EV market is still in the early stages so each additional year of data helps calibrate results.
This is only an excerpt of the findings. BNEF clients can access the full report, its breakdown by technology and region, as well as the underlying Excel data and previous editions. Go to client page or access on the Bloomberg Terminal.