Electric vehicle sales are also expected to triple their current levels by 2025, according to the report.
“Importantly, the market is shifting from being primarily driven by politics, to one in which organic consumer demand is the most important factor,” lead authors Colin McKeracher and Alexandra O’Donovan wrote in a BloombergNEF report.
In 2025, the global auto industry will sell 20.6 million electric vehicles, according to the report, compared to 6.6 million this year. Sales of purely internal combustion vehicles, while expected to remain the majority of total vehicle sales in 2025, will decline.
According to the report, fully battery-powered vehicles will make up 75% of all-electric vehicle sales by 2025. Plug-in hybrid vehicles are not expected to generate a significant proportion of plug-in vehicle sales outside Europe. The report expects additional hybrid vehicle sales to peak around 2026. Fuel cell vehicles, which run on electricity produced from hydrogen gas rather than stored in batteries, are not expected to play a significant role in the passenger car market.
The market penetration of electric cars will not be the same everywhere. The report said that electric vehicles are expected to reach 39% of the market share in China and Europe by 2025. They could make up a larger portion of sales in some European countries, although electric vehicles make up 40% to 50% of passenger car sales. in the UK, Germany and France.
The report predicts that China and Europe will account for 80% of all electric vehicle sales globally in 2025, with the United States accounting for only 15% of the world’s electric vehicle sales. Sales in the United States will begin to trend sharply upward over the next decade, though, as major automakers and startups begin producing electric versions of the kinds of vehicles Americans love to buy.
China’s BYD is the world’s second largest electric vehicle brand, with nearly 600,000 electric and hybrid vehicles sold in 2021.
He said the US also has a lot of catching up to do in terms of public charging infrastructure. The US federal government has announced plans to invest heavily in charging infrastructure. And since a greater percentage of Americans live in single-family homes and can, therefore, charge economically and comfortably at home, there will be a need to reduce public charging here. He said the countries with greater population density, such as China.
McKeracher said one of the biggest surprises in their research was the particularly rapid increase in market share for electric vehicles in China, which has gone beyond government requirements.
“We have long anticipated that there will be a point where politics stops being the primary driver and organic demand really takes over, consumer demand,” he said. “And that seems to be what is happening in China.”
However, road transport is not on track to be carbon neutral by 2050, and even if all vehicles on the road emit no emissions at all, that will not be enough to solve the climate crisis, the authors warn.
“Simply changing the powertrain may not be the most efficient way to achieve net zero, and a full range of solutions will be needed – including more public transportation and active transportation options,” they wrote.
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