China to lead global transition to electric vehicles: BNEF

By 2040, more than 50 percent of all new car sales worldwide will be electric, said Bloomberg New Energy Finance (BNEF) in its Electric Vehicle Outlook 2018. BNEF predicts that global annual electric vehicle (EV) sales will jump from 1.1 million in 2017 to 60 million in 2040, which will be equivalent to 55 percent of the global light-duty vehicle market. China will lead this transition, with EV sales there to account for 60 percent of total passenger vehicles sales by then.

The advancement of e-buses will be especially rapid, with 80 percent of the global municipal bus fleet expected to be electric by 2040. Again, China will lead this transition. The country already accounts for 99 percent of all e-buses on the road globally as it seeks to cut local pollution and reduce its dependence on imported oil.

The global increase in uptake of electric vehicles (EVs) will be driven by government subsidies, larger-scale manufacturing, and decreasing costs. According to the report, EVs will achieve cost parity with internal combustion engine (ICE) vehicles by 2024 as batteries continue to become more affordable. National policies will also play a key role in boosting EV adoption, such as through China’s “New Energy Vehicle” credit system, which requires automakers to generate credits through the sale of EVs.

BNEF expects the transition to EVs to have major implications for electricity demand, and for the oil market. On one hand, EVs and e-buses will require 2,000TWh* in 2040, which will add 6 percent to global electricity demand. On the other, the switch from ICE could reduce oil demand by 7.3 million barrels a day by 2040.

For more of BNEF’s global EV predictions, please refer to the free public report here.

By: Bloomberg New Energy Finance

* TWh: Terawatt hours