Half of passenger vehicles sold worldwide will be EVs by 2032
Transport today is 28% of global energy demand, with the road transport share accounting for over 80% of that. In 2017, transport demand was 116 EJ, and this drops slightly to 112 EJ by 2050. Despite this minor shift, transport is one of the great engines of the energy transition, as the electron gains primacy over the fossil molecule.
Road transport energy use totalled 91 EJ in 2017; it will fall to 84 EJ in 2050, after peaking in 2025 about 10% higher level than today. How can that be, one may well ask, if the world’s vehicle fleet is due to rise by 75% between now and mid-century, and the aggregate distance driven rises from 28 to 60 trillion kilometers? The answer is a massive shift to electric mobility.
As it stands, the world’s fleet of passenger road vehicles is 97.5% internal combustion and 2.5% electric. By 2050 the fleet will have transformed to 73% electric and 27% internal combustion.
The two main drivers of this transformation are policies to reduce local and global emissions, and the ongoing cost compression and performance improvement of battery technology enabling declining EV costs.
Our analysis shows the importance of preferential treatments to initial EV uptake. Norway and China are two examples of this, as will be the EU through its comprehensive emissions reduction plans. Incentives and industrial support are even more critical in the case of commercial vehicles, where batteries are bigger and costs substantial.
In the longer term, cost learning rates – especially the impressive 19% cost compression in battery technology per doubling of capacity – will lessen the need for government support. However, while plunging costs will be the main driver of uptake, other factors are important too, not least the ability of EV technology to address range anxiety. In some regions, average range is expected to triple from today’s levels owing to cost and weight compression per kWh.
Many factors must be considered in modelling EV uptake – cost and range of course, but also the nature of a region’s living standard, geography, the quality of public transport, and the robustness of its electricity infrastructure. The presence (e.g. in EU/OECD) or absence (in less-developed countries) of government support is also important.
Significant road sector energy use in the Indian Subcontinent comes from two- and three-wheelers. These also make up a large share of passenger vehicles in China and South East Asia. In this segment, we foresee rapid electrification: already over a third of all Chinese two- and three-wheeler sales are BEVs. Across the three regions, this share will exceed 90% by 2030.
Our overall conclusion is that, globally, there is a fast uptake of electric vehicles – passenger first, and later commercial. We expect the watershed 50% sales share for passenger EVs to occur globally in 2032. For commercial EVs, uptake is more prolonged. Although China and Europe are likely to see a 50/50 mix in new sales of EV/ combustion for this category in 2030, elsewhere this occurs much later. In some markets where hydrogen will eventually become readily available, FCEV commercial vehicles using hydrogen will make some inroads in heavy and long-haul commercial vehicle transport (up to 17% of the commercial fleet in OECD regions and China), but not in the passenger segment.
We expect passenger EVs to reach the watershed 50% share of new car sales globally in 2032.