GlobalData: 300 Million Electric Cars On The Road By 2040

AUG 8 2018 BY VANJA KLJAIC 24

Electric vehicles are set to fully transform the automotive industry over the next five years

According to GlobalData, a data and analytics company, electric vehicles are set to bring a significant transformation to the automotive industry.

The electric vehicle is one of four items that are disrupting the legacy automotive industry – joining the connected car, autonomous driving technology, and transport-as-a-service. This doesn’t come as a surprise, as EV adoption rates are climbing throughout the world. Additionally, all three other items are set to revolutionize several fields, most notably the safety aspect brought on by the autonomous driving technology.

The latest report by GlobalData titled Electric vehicles – Thematic Research, envisions that globally, while there are only 3 million electric vehicles running wild, this could rise to a staggering 300 million by 2040.

Over the next five years, we expect stress, strain, margin evaporation, and shake out across much of the legacy automotive industry and its Tier-1 parts suppliers as a slow growth industry incurs the expense of conversion to electric vehicle and autonomous driving technology. – Cyrus Mewawalla, Head of Thematic Research at GlobalData

Furthermore, GlobalData predicts that the percentage of new electric vehicle registrations will go from just 1% of global passenger vehicles in 2017, all the way up to more than 15% by 2030. However, they predict that large-scale commercial production of EVs among the largest car makers will unlikely take off before the year 2025, providing ample room for newcomers in the industry to create a foothold in the market. In turn, the legacy car industry will be in for a period of higher capital expenditure.

This is needed due to tougher regulations hitting their current diesel and petrol models, increased M&A activity (Merger and acquisition), increased R&D expenditure, smaller margins, and unprecedented technological disruption. Moreover, GlobalData comes with an ominous prediction that many current car makers will not be able to survive this ever changing tech disruption world, and will go away to become a footnote in the history books.

We are at the very beginning of the cycle, but over the next decade the automotive value chain will be transformed by the electric vehicle theme. – Cyrus Mewawalla

Source: Green Car Congress

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24 Comments on "GlobalData: 300 Million Electric Cars On The Road By 2040"

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ffbj

Yeah, well. Hard to call 2040, but that will still only be about 1/3 of all vehicles.
I think passenger cars will be almost all electric before then, though trucks will take a bit longer.
Thinking that it will be 2025 before the main stream goes electric is really not getting the point.
Car makers don’t have time, they are behind the times, and if they don’t produce compelling electric vehicles by 2020 they will probably be done.

Roy_H

I’m not sure that I agree that car makers will be done if they’re not ready by 2020 but I do agree that the timeline will be much shorter than the article suggests.

How long did it take digital cameras to take over from film, flat screen TVs versus old tube type, DVDs versus VHS style tape? When the shift comes it will be near 100%. I can’t judge too well gobeally but I would say in North America, Europe and China new car sales will be over 95% BEV by 2030.

Dan F.

I suspect that you are wrong; those other transitions produced a superior product that was fairly quickly cheaper to make than the previous product and collectively they represented a FAR smaller part of the world economy than vehicles.

There is no physical shortage of petroleum and the price, minus short term fluctuations both ways, has only climbed slowly. Operationally, EVs are far from offering the utility and flexibility of petroleum powered vehicles.

All the legacy vehicle makers which are planning the near term introduction of EVs ,or have done so already, are doing and planning quite modest numbers in the now to 2023 period to test the market. Per the article, then, 2025 is probably reasonable for possible volume production.

My prediction, FWIW, for 2030 is EVs being 10% to 25% of light vehicle sales globally. We’ll see.

antrik

Actually, flat screen TVs for example took a long time before they were cheaper than CRTs — in fact that didn’t happen until after the bulk of the transition in sales happened…

You make a good point though that these technologies took hold while still being more expensive, since they were seen as superior; while EVs don’t have that status among many people — at least not yet… This might very well change, as the advantages become ever more clear, and the disadvantages less significant, while the price difference will soon be trivial. (And at some point during the next decade actually tilt towards EVs…)

Either way, current trends suggest the bulk of the transition will happen pretty soon.

Pushmi-Pullyu

We shouldn’t assume the EV revolution will progress as fast as the cell phone revolution or the digital camera revolution. Those proceeded at the pace of Moore’s Law, with computer memory doubling every 18 months, and transistors shrinking in size even faster.

Batteries are shrinking in size and cost much slower. There is no Moore’s Law for batteries; or rather, the similar improvement in smaller sizes is happening much slower. Still, battery advances are happening at a much faster pace than just about any tech advance except electronics!

On the other hand, they say that New York City went from a city almost entirely served by horse-drawn vehicles to almost entirely served by motorcars and -trucks in the space of 13 years. Perhaps it’s not overly optimistic to hope that the transition from gasmobiles to PEVs will happen that fast, once the transition is actually well underway… and we’re still a few years away from the proper start of that.

Hopefully 2040 is much too pessimistic a date for the triumph of the EV revolution!

antrik

Trucks won’t take longer. In fact it will happen sooner than for passenger cars, since the economic advantages are clearer with bigger mileage; and most trucks need replacements more often.

Scott Franco
Trump will succeed in pausing the increased emission standards so that is a moot point (note “paused”, not “revoked” as often breathlessly reported by idiot media), so that is not a factor. US makers are experiencing falling sales but will not change course, since they mostly sell trucks, for which EV versions are mostly non-existent. The few EV truck makers are targeting commercial, short range applications, which is a good short term strategy, but a terrible long term strategy. The short of the situation is that Toyota, Honda and Nissan, who took the sedan market from the Americans, are about to get a tidal wave breaking on them that even now they are woefully unprepared for. Its funny because their taking the american market was largely due to a combination of price and the introduction of hybrids, which the Americans ignored, but now the Asian makers are mostly ignoring the move to pure electrics. I predict: Telsa will gain significant market share from the tigers, Nissan will not catch up in any reasonable amount of time, Toyota will double down on its insane FCV bet, and Honda won’t wake up anytime soon. GM and Ford will watch the sedan, and… Read more »
Nordic

Look at the situation in Norway (most advanced EV market):

http://ev-sales.blogspot.com/2018/08/norway-july-2018.html?m=1

Nissan, VW and BMW in the lead. Don’t think they’ll relinquish that lead anytime soon. US will of course be very different – but Norway trend may we’ll be typical for Europe.

ffbj

That’s quite a leap that Trump will succeed in rolling back emission standards, with no evidence to support such a claim. Why will it happen? Just because.

Scott Franco

I assume that was aimed at me. GO READ IT AGAIN. There is no ROLLBACK being proposed. By ANYONE. They are talking about simply leaving the requirements as they are. Getting really tired of IDIOTS repeating this NONSENSE.

pjwood1

Attempting to reverse a standing final EPA rule is a ROLLBACK. Going to a 37mpg (28-29 real world) puts accountability for pollution, and consumer values on hold, so makers and oil producers can socialize their desires upon everyone else. Revoking the CARB waiver is a ROLLBACK. GO READ IT AGAIN. This Admin, and its cronies, want free stuff before we even begin to talk about taking away STATES RIGHTS.

antrik

How is going for the low hanging fruit first a terrible strategy? It’s not like truck makers are ignoring the other segments — they are just taking them one at a time…

SJC

Not even close, I wonder where they pulled THIS out of.

Nordic

The timeline will be much shorter:
2018: 2 million PEV
2019: 3.2
2020: 4
2021: 6.4
2022: 8
2023: 12.8
2024: 16
2025: 25.6
2026: 32
2027: 51.2 (50%)
2028: 64

2030: 90% PEV

These are sales per year. So far this timeline has been followed. And I believe it will continue to be. With 4 million PEV sales in 2020 suddenly “everyone” will start adjusting their predictions.

JoeInTheUK

You can predict away but the issue is, legacy manufacturers aren’t planning to ramp up production to that level.
Even two of the most bullish, VW and Volvo plan to produce only 25% and 50% respectively by 2025 and whatever the demand will be, the time to ramp up production,especially batteries, acts as a brake on sales.
Every other manufacturer will be behind those even if they have a massive change of heart in the next year or two, just due to finance and logistics.

antrik

Notice how the exponential growth trajectory predicts ~25% by 2025, which is not impossible, considering that a number of car makers are already planning for this sort of capacity by 2025.

Also note that EV adoption has been mostly production-constrained by a number of years now — yet the exponential growth is keeping up. No reason to expect this to change…

(It just means it won’t happen quite as fast as it *could*, if it wasn’t for the production constraints.)

Pushmi-Pullyu

There most definitely is a reason to expect this to change, and that is the increasing shortage of EV battery cells, a shortage which will rapidly increase over the short term.

That’s not going to change until many or most legacy auto makers bite the bullet and invest billions in building high-capacity battery factories whose production rate is controlled by auto makers, rather than controlled by battery cell makers.

Tesla and BYD are the only auto makers which will not be production constrained by availability of batteries for at least the next few years.

https://insideevs.com/lithium-ion-battery-shortage-looming/

antrik

No, Mr. Broken Record, the 100 GWh of additional battery production capacity coming up within the next two years or so, and further additions being announced all the time, do *not* suggest that exponential growth will end any time soon.

Believe it or not, car makers ramping up their EV production capacities tend to order batteries to power these cars; and battery makers getting orders tend to add production capacity so they can fill the orders. It’s like magic!

SJC

DEMAND, that is the key!
It is a demand driven system, no demand then no huge EV sales. <1% in 8 years is not a wave.

Pushmi-Pullyu

You’re projecting a fixed exponential growth curve. That’s not how disruptive tech revolutions work. Market penetration during disruptive tech revolutions work in an S-curve, which is rather harder to project than a simplistic fixed exponential curve.

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antrik

The first half of the S-curve tends to be pretty much exponential; so the projection to around 2027 should be close. (Give or take a year or two, depending on the actual CAGR.) After that, it starts an asymptotic approach towards 100%…

antrik

It keeps baffling me how “connected” is always listed as a “disruptive” transformation along with electric, autonomous, and ride haling / transportation services… Beside minor convenience features, the only importance “connected” has, is in being a precondition for autonomous ride hailing. However, being trivial to retrofit at little cost in any existing car model, that’s no meaningful barrier at all. Nothing disruptive about it.

Pushmi-Pullyu

Being “connected” will be increasingly important as cars become more autonomous. The need for self-driving cars to communicate with each other, and with some sort of stationary network of traffic monitoring computers, will become increasingly important over time. Connectivity is also important for OTA updates, as Tesla uses and as some other EV makers are starting to do.

But for the personal use of drivers and passengers, I don’t see much difference between using a cell phone and using wireless “connectivity” in a car. I’m guessing that was your point?

Boki

Tiping point is in 5 years from now, after that majorety of consumers will whant only BEV.