Electric vehicles set to quintuple by 2025

Los vehículos eléctricos se quintuplicarán para 2025

The road transport sector can still reach net-zero emissions by 2050 through electric vehicles, but urgent action is required from policymakers and industry participants, according to BloombergNEF’s (BNEF) latest annual Long-Term Electric Vehicle Outlook (EVO).

The reportoutlines two scenarios for the uptake of electric transport to 2050, and examines impacts on demand for batteries, materials, oil, electricity, infrastructure and emissions. The Economic Transition Scenario (ETS), which assumes no new policies and regulations are enacted, is primarily driven by techno-economic trends and market forces. The second scenario investigates what a potential route to net-zero emissions looks like for the road transport sector by 2050. This Net Zero Scenario (NZS) looks primarily at economics as the deciding factor for which drivetrain technologies are implemented to hit the 2050 target.

Passenger electric vehicle (EV) sales are set to grow rapidly in the next few years, rising from 6.6 million sold in 2021 to 21 million in 2025. The fleet of EVs on the road hits 77 million by 2025 and 229 million by 2030, based on BNEF’s Economic Transition Scenario. That’s up from 16 million at the end of 2021, and reflective of the remarkable success story of EVs in the energy transition to date.

As EV uptake continues to grow, they are already displacing 1.5 million barrels of oil demand per day. Most of this is from electric two- and three-wheelers in Asia, but rising passenger EV sales push this to 2.5 million barrels per day by 2025. Overall, oil demand from road transport is now set to peak by 2027, according to BNEF’s findings.

To get on track for a net-zero global fleet by 2050, zero-emission vehicles need to represent 61% of global new passenger vehicle sales by 2030, 93% by 2035, and the last ICE vehicle of any segment needs to be sold by 2038. The report also found that vehicle-to-grid (V2G) technology can play a role in driving down power sector emissions and generating value for consumers.

The fleet of passenger electric vehicles is set to hit 469 million in 2035 in the Economic Transition Scenario but needs to jump to 612 million by the same date in the Net Zero Scenario.

Looking at different segments, two- and three-wheelers and buses are already very close to the trajectory needed to achieve BNEF’s NZS. However, medium and heavy commercial vehicles are lagging far behind, and need strong additional policy measures to meet net zero. Under the Economic Transition Scenario, only 29% of these vehicles achieve zero emissions by 2050 – far from the full adoption needed for net zero.  

The report also explores whether batteries or fuel cells are the more likely solution for heavy-duty, long-haul freight. By the end of the 2020s, megawatt-scale charging stations, as well as the emergence of higher energy density batteries, will result in battery-electric trucks becoming a viable option for heavy-duty long-haul operations, especially for volume-limited use cases.

EV manufacturers are contemplating a market for battery raw materials that is very tight for the years ahead. The battery supply chain will require significant near-term investment to avoid a supply crunch. Yet, the rising cost of batteries will not derail near-term EV adoption. Some of the factors that are driving high battery raw material costs – war, inflation, trade friction – are also pushing the price of gasoline and diesel to record highs, which in turn is driving more consumer interest in EVs.