Global EV sales set to triple by 2026 led by China, Europe, and the U.S.
Energize Weekly, July 12, 2023
Electric vehicle (EV) sales are projected to almost triple between 2022 and 2026, reaching nearly 27 million vehicles as the technology pushes beyond automobiles to trucks and buses, according to an analysis by BloombergNEF (BNEF).
“This is due to new stronger policy support in the U.S., early EV progress in a few emerging economies like India, Thailand and Indonesia, growing global investment in charging infrastructure and the battery supply chain, and technology innovations like sodium-ion batteries,” BNEF said.
The cumulative value of EV sales across all segments is projected to reach $8.8 trillion by 2030, with China accounting for 43 percent of the activity, Europe for 24 percent, and the U.S. for 21 percent.
Overall, the share of worldwide passenger vehicle sales for EVs more than doubles to 30 percent between 2022 and 2026, with a little more than half of those sales in China and about two-fifths in Europe.
“In the U.S., a major push from the Inflation Reduction Act means EVs make up nearly 28 percent of passenger vehicle sales by 2026, up from 7.6 percent in 2022,” according to BNEF’s 2023 Electric Vehicle Outlook.
Electrification is spreading to other segments of the vehicle market. Light commercial electric truck sales – thanks to improving economics, a wider variety of models and commitments to electrify fleets – are projected to make up 70 percent of the global sales by 2040.
Municipal buses are also electrifying quickly as Europe and the U.S. start to catch up with China. By 2026, European electric bus sales will account for 36 percent all sales, and American sales will reach a 24 percent market share.
Meanwhile, BNEF said that internal combustion engine (ICE) vehicle sales have peaked and are now in long-term decline. Oil demand for road transport is very near its peak.
EVs of all types are now displacing about 1.5 million barrels a day of oil demand. “This rises dramatically in the years ahead, leading to a peak in overall road fuel demand in 2027,” BNEF said.
Oil demand from road transport drops 21 percent to 33.5 million barrels a day in 2040, compared with 2022 consumption. Fuel efficiency improvement of ICE vehicles and the increased shared mobility are also part of the decline in oil demand.
The EV market does have challenges to growth, notably improving the distance a vehicle can travel on a battery charge to address “range anxiety” and adequate charging and electric infrastructure.
“Direct electrification via batteries is the most efficient, cost-effective and commercially available route to fully decarbonizing road transportation,” BNEF said.
Battery prices have fallen over the last decade, and emerging technological innovations – such as solid-state batteries, next-generation cathode and anode chemistries, and sodium-ion technology – will continue to address issues of price and range.
“Although public charging infrastructure is growing at pace globally, it still presents a potential barrier to electrifying the last 10-20 percent of the market in many countries,” the report said.
In addition, the global electricity demand from all EVs is projected to increase fivefold between 2022 and 2030 to 1,027 terawatt-hours. More than $1 trillion in cumulative investment in EV charging infrastructure is required globally over this period, BNEF said.
“Eliminating emissions from road transport will require all hands on deck, including automakers, battery manufacturers, charging companies, grid operators, miners, large fleet operators, and consumers,” the BNEF report said.
