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EVs Expected to Account For Half of New-Car Sales by 2040

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【Summary】A new analysis by Bloomberg New Energy Finance claims that electric cars are on path to account for 57 percent of all passenger car sales worldwide by 2040.

Original Vineeth Joel Patel    May 18, 2019 6:00 AM PT
EVs Expected to Account For Half of New-Car Sales by 2040

At the moment, electric vehicles don't account for a large amount of new-car sales worldwide. Sure, EVs are big in China and in northwestern European countries, but the rest of the world hasn't caught the electric bug yet. Blame it on a lack of subsidies, range, or price, but gasoline- and diesel-powered cars still reign supreme around the world. That could change by 2040, though.

EVs To Take Over In Two Decades

According to CNN, citing an analysis by Bloomberg New Energy Finance, battery-powered machines could make up for roughly 57 percent of all passenger car sales worldwide by 2040. Last year, BNEF believed that EVs would account for 55 percent of passenger car sales by that date.

"We see a real possibility that global sales of conventional passenger cars have already passed their peak," said Colin McKerracher, head of advanced transport for BNEF.

Automakers have made some incredible strides with electric vehicles recently. Looking at Tesla is a great way to see just how capable modern electric cars are. The new Model S Long Range now has 370 miles of range, which is incredible, as the majority of EVs are hovering around the 220-mile mark. Prices for electric cars are starting to come down, which is apparent by Tesla's $40,000 Model 3. You don't have to be psychic to anticipate that things will continue to improve with electric cars.

Currently, electric vehicles account for 2 million units of sales, but BNEF predicts that the figure will increase to 56 million by 2040. While sales of EVs will increase, vehicles that run on gasoline and diesel will see sales drop. The outlet states that sales for those cars will fall from 85 million to 42 million.

CNN claims that the shift from "conventionally powered" vehicles to battery-powered machines boils down to declining battery prices. As the outlet points out, battery prices per kilowatt-hour have decreased by 85 percent since 2010. Improves in the manufacturing process and increased economies of scale are to credit for lower battery prices. Lower battery prices equate to cheaper electric vehicles, which should entice more drivers to make a switch.

Potential Roadblocks

With prices for EVs continuing to fall, CNN believes that electric cars should be cheaper and less expensive to maintain than internal-combustion vehicles by the mid-2020s.

Ride-sharing services will also shift to electric vehicles, but that shift will occur on a quicker timeline than private owners' transition, claims BNEF. "There are now over a billion users of shared mobility services – such as ride-hailing – globally," said Ali Izadi-Najafabadi, BNEF's shared mobility research leader. "These services will continue to grow and gradually reduce demand for private vehicle ownership."

This is all good news for electric cars, but things may not be as bright for consumers in the U.S. Twenty four states in the U.S. have introduced special fees that only pertain to EV owners. While the majority of fees are in the $200 ballpark for electric cars, Illinois recently came out with a $1,000 annual fee. If more states were to follow Illinois, EV adoption could be slower than BNEF's prediction.

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