The outlook for electric vehicles is brighter than ever, with BloombergNEF (BNEF) estimating that EVs represent a $7 trillion global market opportunity between today and 2030 and a $46 trillion opportunity between now and 2050, under its Economic Transition Scenario (ETS).
This growth trajectory is clearly defined in BNEF’s latest annual Electric Vehicle Outlook (EVO). However, the report also urges governments aiming for net-zero carbon emissions by 2050 to do more to spur their adoption.
Achieving net zero goals will require decisive further policy action on all fronts, as well as encouraging active modes of transport, such as cycling and walking, according to BNEF.
“The growth of electric transport is an amazing success story to date, and the future of the EV market is bright,” said Colin McKerracher, head of the advanced transport team at BNEF. “But there are still over 1.2 billion combustion cars on the road and the fleet turns over slowly. Reaching net zero by mid-century will require all hands on deck, particularly for trucks and other heavy commercial vehicles where the transition has barely started.”
For the first time, the EVO examines what would be required to bring global road transport emissions onto a trajectory compatible with net zero by 2050 and presents analysis based on two scenarios.
BNEF’s ETS – which assumes no additional policy measures – would see global sales of zero-emission cars rising from 4% of the market in 2020 to 70% by 2040. Leaders like China, the U.S. and European economies run far ahead of these numbers, but lower levels of adoption in emerging economies reduce the global average. The equivalent for buses sees their zero-emission sales rise to 83% by 2040. Zero-emission light commercial vehicles grow from 1% today to 60% of their market over the same time period and medium and heavy commercial vehicles to just over 30%, from almost zero now.
In this year’s report, BNEF added a Net Zero Scenario (NZS) for the road transport sector. The scenario shows that zero-emission passenger cars, for instance, would have to hit almost 60% of sales in their segment globally by 2030, not 34% as they do in the ETS. That’s 55 million EVs sold in that year, as opposed to 32 million.
Heavy trucks slowing progress
“Policymakers need to take urgent action in the heavy truck segment, which is far from being on course for net zero,” said Nikolas Soulopoulos, commercial transport team lead at BNEF. “In addition to introducing tighter fuel economy or CO2 standards for trucks, governments may need to consider mandates for the decarbonization of fleets. They should also consider incentives to push freight into smaller trucks, which can electrify faster than larger ones.”
The charts below show that two segments within road transport – two/three wheelers, which are heavily used in developing countries, and buses – are close to being on track to hit net-zero emissions by 2050, just on the basis of established trends in relative economics.
The projections for cars and light commercial vehicles are shown as being on a “positive trajectory” because even without further policy measures, current trends get the market to move a big step toward meeting net zero by 2050, even if timelines will have to be accelerated. But the outlook is far more problematic in the heavier commercial vehicle segments.
The report also examines the wider implications of both its ETS and its NZS for road transport. It estimates that EVs represent a $7 trillion global market opportunity between today and 2030, and $46 trillion between now and 2050, under the ETS.
Key report estimates for the ETS:
- By 2040 the charging network needs to grow to over 309 million chargers across all locations
- Home chargers would have to reach 270 million, public chargers 24 million, workplace chargers 12 million and bus and truck chargers 4 million. To install all of these would require over $589 billion of cumulative investment in the next two decades.
- The electricity used to charge EVs on the road would add 9% to global demand by 2040.
- Lithium-ion battery demand from EVs is set to rise sharply, from 269 GWh in 2021 to 2.6 TWh per year by 2030 and 4.5 TWh by 2035.
Under the NZS, all the numbers above would have to be much larger. For chargers, $939 billion would be required in investment by 2040 to install 504 million units. For electricity demand, that scenario would take the extra megawatt-hours needed to 14% by 2040 and to just over 25% by 2050. For the EVs themselves, the total market opportunity reaches $80 trillion cumulatively by 2050.
The window for achieving net-zero emissions in the road transport sector by 2050 is closing quickly. An immediate increase in policy action is needed to bend the curve toward net zero. Investments in public transit and active mobility are an important part of the solution mix for net zero, as they can reduce demand for vehicles and vehicle miles, while also delivering a public-health benefit.