Bloomberg New Energy Finance: Electric Vehicles To Be 35% Of Global New Car Sales By 2040

MAR 10 2016 BY MARK KANE 37

chevrolet bolt outside

Chevrolet Bolt EV

Bloomberg New Energy Finance released a pretty bold forecast of a bright electric vehicle future.

Their main statement is that by 2040 EVs (pure electric and plug-in hybrids) will take 35% market share of new car sales. That concerns global average so there sure should be places where EVs will be in majority.

EVs To Be 35% Of Global New Car Sales By 2040

By 2025 BNEF expect total cost of ownership of EVs below that for conventional-fuel vehicles assuming continuing reductions in battery prices and “even with low oil prices“.

“The electric vehicle revolution could turn out to be more dramatic than governments and oil companies have yet realized. New research by Bloomberg New Energy Finance suggests that further, big reductions in battery prices lie ahead, and that during the 2020s EVs will become a more economic option than gasoline or diesel cars in most countries.”

Batteries prices are seen as main factor. BNEF uses $350/kWh level as base for 2015 and expects less than $120 on average by 2030.

One interesting tidbit is the different take-offs for pure electric cars (BEVs) and plug-in hybrids (PHEV), which is projected to fade after 2030.

Bloomberg New Energy Finance: It's all about the batteries

Bloomberg New Energy Finance: It’s all about the batteries

“The electric vehicle market at present is heavily dependent on “early adopters” keen to try out new technology or reduce their emissions, and on government incentives offered in markets such as China, Netherlands and Norway. Although some 1.3 million EVs have now been sold worldwide and 2015 saw strong growth, they still represented less than 1% of light duty vehicle sales last year.

EVs come in two categories – battery electric vehicles, or BEVs, that rely entirely on their batteries to provide power; and plug-in hybrid electric vehicles, or PHEVs, that have batteries that can be recharged but have conventional engines as back-up. The best-selling BEV over the last six years has been the Nissan Leaf, and the best-selling PHEV the Chevrolet Volt.”

“The study’s calculations on total cost of ownership show BEVs becoming cheaper on an unsubsidised basis than internal combustion engine cars by the mid-2020s, even if the latter continue to improve their average mileage per gallon by 3.5% per year. It assumes that a BEV with a 60kWh battery will travel 200 miles between charges. The first generation of these long-range, mid-priced BEVs is set to hit the market in the next 18 months with the launch of the Chevy Bolt and Tesla Model 3.”

We noted key forecasts from the report:

  • EVs To Be 35% of global new car sales by 2040
  • 41 million sales annually by 2040 (90 times the 462,000 in 2015)
  • a quarter of the cars on the road in 2040 will be EVs
  • displacing 13 million barrels per day of crude oil but using 1,900TWh of electricity (8% of global electricity demand in 2015)
  • less than $120/kWh of lithium-ion batteries by 2030

Colin McKerracher, lead advanced transportation analyst at Bloomberg New Energy Finance, said:

“At the core of this forecast is the work we have done on EV battery prices. Lithium-ion battery costs have already dropped by 65% since 2010, reaching $350 per kWh last year. We expect EV battery costs to be well below $120 per kWh by 2030, and to fall further after that as new chemistries come in.”

Salim Morsy, senior analyst and author of the study, commented:

“Our central forecast is based on the crude oil price recovering to $50, and then trending back up to $70-a-barrel or higher by 2040.1 Interestingly, if the oil price were to fall to $20 and stick there, this would only delay mass adoption of EVs to the early 2030s.”

“In the next few years, the total-cost-of-ownership advantage will continue to lie with conventional cars, and we therefore do not expect EVs to exceed 5% of light duty vehicle sales in most markets – except where subsidies make up the difference. However, that cost comparison is set to change radically in the 2020s.”

source: Bloomberg New Energy Finance

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37 Comments on "Bloomberg New Energy Finance: Electric Vehicles To Be 35% Of Global New Car Sales By 2040"

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Too conservative

I agree – this is a fantasy. I predict that you will have a hard time finding a gas/diesel vehicle to purchase by 2030. They are inferior in almost every way to all-electric drive vehicles of today. In 24 years technological innovations in EVs will have rendered fossil fuel cars completely

John, even more than finding a diesel or gas car, where are they going to find the gasoline or diesel in 2040?
We are on the downslope of the oil production curve which will only gain speed as the old wells go dry.
Just the natural 5%/yr decline in oil wells and 25% for tight/shale oil means we’ll have to find a lot more and more expensive oil.
Vs an EV in only 10 yrs will have 300 mile range and 1-15 minute recharge costing les to buy and 20% to run of a gas car.
Not many will be buying ICE tech.
There will be 1,000 mile swappable batteries giving any EV that range by then. the tech is already here, just needs production.
I see homes, apartments, etc powered with these too.
By just 2030 the FF tide will have seriously ebbed as just cost too much compared to everything else.

It is either too conservative or too optimistic.

It shows PHEVs dying and pure EVs dominating. The only way that happens is if battery prices drop heavily and/ot gas prices shoot really high. If that happens then EVs become the majority.

If battery prices don’t drop heavily then PHEVs will be a much bigger slice. Thus it is too optimistic on pure EVs.

Spec said:

“It is either too conservative or too optimistic.”


In the real world, during disruptive tech revolutions, the new tech takes over the market in an “S” curve of exponentially accelerating sales growth, followed by a rapid tapering off in the “diminishing returns” phase of the market takeover.

The type of analyst forecast cited in the article above always ignore history and assume near-linear growth.

You are right; people can read the Chasm Theory of Marketing to learn the mechanics.
Spec is wrong in market timing. Panasonic and Tesla will make batteries at less than $100/kWh by 2020, and will probably reach or pass 330 Wh/kg by then. LG Chem swore to keep up with them, and is able to do it. Other companies will be in there swinging, and may come out ahead.
Because these batteries will also be sold for stationary markets, they will help realize the full economic potential of wind, solar, run-of-stream hydro, wave power, and any other intermittent renewable energy resources.
That means that sales of all of the above will take off like the Tornado of Demand described in the Chasm Theory of Marketing. At least some players in each category will have paid attention to scalability in their manufacturing methods, and we may actually see something bigger than the mobilization for WWII, as capital chases the money.

Tesla is shooting for $100 per kWh, they’ll surely get to it sooner than this projection.

I think once we get to the point of 10% sales, it will take off more exponentially than their graph shows. Because at that point, the snowball will be rolling. If 1 out of 10 buyers is buying an EV then most of the public education hurdles have disappeared, charging infrastructure has probably been developed out better, and I think most everyone will know somebody else with an EV to help bust any myths and show them the better driving characteristics of an EV.

Totally ignores the disruptive potential of self driving cars, which enable personal mobility as a cheap service to order when needed.
Who wants to own and mantain a car, when he can call one any time he needs for far less money?
Imho global car market will start to shrink drastically in 7 to 15 years.

I seriously doubt that. I would imagine for a person who needs a car once or twice a month, you may be right. But for the daily commuter, owning your own car will always be the cheapest way to drive. The economics just don’t add up for how somebody else could own a car and take you to work every day and you be able to pay them less than what it costs for you to own your car. The self-driving part has no affect on that.

Imagine an electric Uber-car, working 24h without the cost of the driver and with intelligent pooling-software, which collects several persons with start and destination points close to each other.

So on the contrary, a car that sits in a parking lot 90% of it’s lifetime can never be cheaper than a well used and pooled car imho.

I can easily “imagine” that this will yield reliable, timely transportation only in high population density areas; areas where taxi service is already so ubiquitous that owning a car is optional.

And everywhere else, people will need to own their own cars to have reliable transportation… just as they do now.

The idea that self-driving cars will magically make it affordable for the taxi/Uber company to always have a car lurking in your neighborhood, to be quickly summoned any time you please… is a unicorns-and-rainbows fantasy.

Objection noted. I would reply that your needs to go somewhere are in many cases to get something. In the autonomous future most of these things can come to you very quickly (think drones).

I guess the future will prove one of us wrong. Could be me. Only time will tell.

I can easily believe that we’ll see some sort of near-instant door-to-door delivery service in the future. I just don’t think it will be using the same sort of vehicles used to move people from one place to another; it’s massively inefficient to use vehicles that large and expensive just to move a package or a sack of groceries… or a hot pizza.

Everybody jokes about using flying drones to deliver packages, but I rather think it won’t be many years until that’s no joke at all. I think it will be a joke about as long as the “Japanese transistor radio” was a joke in the late 1950s and early 1960s.

Who cares. Nobody researches old forecasts and how accurate were they.

I do, it’s fascinating how much you can learn about people from looking at these predictions. My personal favorite is the peak oil stuff from the 70’s which was bang on. 2005 came, we hit peak light sweat crude (which was all people in the 70’s could imagine being cheap enough to extract to burn as a fuel) and everything became unstable, we are still trying to work out what to do 10 years on. We can go for unconventional oil (everything from bio-fuel to tar sands) but it is really expensive or we can bring in new technology that reduces oil consumption. We’re trying a mixture of both, what a mess. My other personal favorites are climate modelling where the models in the 90’s predicted that Britain would be warmer, dryer but with more flooding – plenty of jokes made about that in the press but look whats happened. Then there is all the ozone stuff my favorite state out of that was in the early 90’s people said that 1 in 6 Australians would get skin cancer much mocked in the terminator movie where the girl sun bathing smears a thick layer of multi-colored paint on herself for… Read more »

Little nitpicking: The girl with the anti-sun-paint was in the first Robocop movie 😉

Power station shut-downs = opportunity for renewable energy and newly cheap battery storage (or thermal salt, for thermal solar).
Lots of people are waking up to, or already working on, control systems for building to grid and vehicle to building or grid. There are places in Australia and Hawaii where solar penetration already goes close to 100% from time to time. The centralized business model is the only thing that’s too brittle to stand up to it.

I haven’t read the report but we will see.

This seems like a fairly sensible approach based on price which is pretty good place to start but as people have said above it doesn’t factor in self driving cars or legislation. If the in the EU 95g/CO2 is the average fleet limit there will be far higher PHEV’s in that market – if the auto industry meets that target it will be at 30% in the early 2020’s. I can’t understand why PHEV’s would drop off if batteries are cheap then PHEV’s will simply substitute HEV’s.

I love the 8% of the worlds electricity stat. I hope that catches the eye of those in the power industry which is currently stuck in a world where household PV and efficiency improvements are making the near future look very bleak.

“a quarter of the cars on the road in 2014 will be EVs.” I think that is an error on the date, should be 2040.

I would say by 2040 80% of new car sales will have some electrification. Recent studies have show that predictions going out further than 5 years are extremely inaccurate in regard to technology.

We shouldn’t look at this forecast in any other way than it’s a hopelessly inadequate outcome. Global zero emission vehicle sales need to be 100% well before 2040. The fleet needs to be zero emissions before 2040. The more difficult transitions in agriculture and aviation can then be completed. Perhaps I’m wasting my time saying it, but it needs to be said that the challenge is much more serious than a convenient transition away from ICE vehicles. Global carbon dioxide emission pathways might not be favoured reading, but the prognosis should be alarming: – A global carbon budget 250 Gt to zero by 2050 per IPCC AR5 scenario yields 66% odds for +2 deg C. – IPCC/Hansen carbon budget 175 Gt to zero by 2040 yields only a 50% probability for achieving +1.5% deg C . Paris COP21 agreement is that all actions are to be measured against the 1.5 degree target – we agree on achieving less than +2 deg C, and are targeting + 1.5. Just saying, very hypocritically from Australia, the worst country on the planet for meeting it’s climate change obligations, and from the state of Victoria with some the the world’s most polluting brown coal… Read more »

Politics could have bigger, but unpredictable effect. Norway is going to effectively ban ICE cars. What if EU, USA and China do the same in the 2020s?

Market share for EV’s (BEV’s + PHEV’s) have already reached 42.2% in Norway!
– so these figures might actually be quite conservative

Numbers are as of February 2016, ref. (official numbers – in Norwegian):



Taking the same source i arrive at different numbers. They have reached 28.5%

Hybrid: 2794 (Marketshare 22.9%)
-Hybrid without PHEV: 1231 (10.1%)
-PHEV: 1563 (12.8%)

BEV: 1927 (15.7%)

Making a marketshare of Hybrid+BEV = 38.6% and a marketshare for pluginable EVs = 28.5%

Still high, but not above 40%.

Total february vehicle sales = 12.222

2.794 = hybrids
(including 1563 PHEV’s)
1.927 = BEV’s
371 = parallell imported BEV’s
67 = BEV delivery van’s
10 = parallell imported BEV’s

Which in sum gives:
-Hybrid+PHEV+BEV = 5.169 = 42.3%
-PHEV+BEV = 3.938 = 32.22%

So, yes – my numbers was inaccurate, but my conclusion stands. 35% so many year into the future might still be conservative!

Exactly — maybe not a ban immediately — but look for a HUGE tax on them….likely a carbon tax depending on estimated emissions over its life.

There are more than 300,000 carbon emitting units in the USA. We need to get rid of them.

IMO one really big issue is the confidence that future EV drivers will need to have in future fast charge networks. In other words, the masses (now I said the masses) will not start driving EVs unless long distance travel becomes as reliable as visiting a gas station to fill up with gas. Here is an article I wrote about this:

@Brandon, well as a person who does a lot of long distance travel by car, I find the Tesla Supercharger network with f r e e & fast charging (I never drive over 300km without taking a small break of 20mins) – unbelievable value proposition.

There are very few arguments left to buy an ICE car or driver one for that matter
> pollution higher & status (top 3 reasons people buy a car in the 1st place)
> initial price with Model 3 same, but maintenance a lot higher
> free charging on long distance
> fully capable autopilot with free updates over the air
> Acceleration 0-60mpg from traffic lights (it doesn’t matter who speeds up to the 120km fastest unless you are going to pay the fines)

All new cars in Norway will be electric cars in less than 4 years.

No way – way too many people want SUV’s and 4WD cars to handle the tough winter conditions.

The Mitsubishi SUV is currently the only option that fits these needs, and these two segments needs to have at least 2-3 popular models with BEV’s for BEV’s to conquer these segments also.

Currently BEV’s totally dominate the compact segment with e-Golf, Leaf Golf GTE and Audi A3 e-tron and Renault Zoe. The larger estate/stationwagon segment now sells a lot of Passat GTE, but other options are limited. On SUV’s the Mitsubishi sells well, but no battery-car exist from other brands yet (Volvo starts delivering XC90 T8 soon, but this is a very expensive car)

My bet is the opposite…..35% gasers and 65% EVs……and that may be conservative. Just look at the LED light bulb — it went from super expensive and super small share to > 35% share and inexpensive in just a few years… one thought they could become that cheap and efficient so fast…..but they did. (Note Governments began phasing out the incandescent bulbs which sped this up….) Once EV’s get to cost parity and have >250 mile range as standard — which will likely be within 5 years — lights out on the gasers. Not to mention — governments are going to make it more and more difficult to sell gasers…..the regs are coming…..

It depends on where the most growth in auto sales occurs, and how the governments in those regions choose to deal with it. We expect the big increases to happen in China and India. Maybe that will radiate out to the countries they are investing in (Central Asia, maybe Latin America).

However, over 50% of humanity now lives in cities, and rising. The places with the most growth are already heavily urbanized and will get more so. How will the governments deal with this congestion catastrophe? Will they restrict cars, push EVs, or do nothing while the car-sharing firms take the initiative?

The average potential car owner of 2040 might be a relatively well-paid person who lives in a city, but will he want to deal with the hassles of owning a car there?

Apart from being to pessimistic the report misses the point that phev are for sure going to eat up all remaining gas cars that may be left much sooner than they will start to diminish themselves in favor of pure bev.

Meh! I’m with Tony Seba on this one when he says that, by 2030 ALL NEW cars will be electric, not fuel cell or hybrid or PHEV, electric.

I entered college just as the original IBM PC was about to be launched (1980-1981) and for my entire adult life I have been witnessing one disruption after another. I sense that we are close to a couple of major disruptions in the automobile business.

Right now most people don’t know anybody who drives an EV, just like most people didn’t know anybody who had a smart phone when they just came out. The next phase is when everybody knows at least one person who drives and EV and then before you know it everybody’s buying one!

Indeed. Norway is our crystal ball, EVs are selling like hotcakes there when the playing field is evened out. If EVs are priced the same as ICEs, the EV wins every time.