Even Big Oil Foresees an Explosion of Electric-Vehicle Sales

2017 Chevrolet Bolt EV charging

As much as Tesla seems to dominate the automotive news cycle some days, the California electric-car maker remains a small player in a narrow niche of the market. Tesla didn’t even reach 80,000 global sales in 2016. That’s a small portion of the approximately 750,000 electric vehicles made worldwide last year, by all automakers combined, which in turn added up to just 0.2 percent of global vehicle sales. That’s a reality check, to be sure. But organizations studying the growth of the EV market—including some that are not proponents as much as observers or even competitors—are adjusting their forecasts upward.

According to Bloomberg New Energy Finance (BNEF), EVs will comprise the majority of the new-vehicle market by 2040—54 percent, versus 35 percent as it previously forecast. BNEF expects EVs will comprise one-third of the total vehicles in service by 2040, as internal-combustion vehicles are retired and replaced with electrics.

There’s one big asterisk to BNEF’s bullish predictions: They include plug-in hybrids (PHEVs), which of course do still have an internal-combustion engine under the hood, pitching in to varying degrees. But by that time more complex PHEVs will be on the decline, they note, making up only 15 percent of the EV total—so even given that, nearly half of the vehicles sold by then won’t have a gas tank.

Now, even Big Oil believes it is seeing a faster rise for EVs than previously forecast. Exxon Mobil had been anticipating 64.8 million EVs globally, but it has now raised that estimate to 100 million. BP foresees EVs breaching the 100-million mark by 2035, a big leap beyond its previous forecast of 71.4 million. The International Energy Agency, too, has boosted its conservative base-level estimate to more than 55 million EVs by 2030, cumulatively, while OPEC expects to see 266 million EVs by 2040.

Bloomberg New Energy EV forecast“While EV sales to 2025 will remain relatively low, we expect an inflection point in adoption between 2025 and 2030, as EVs become economical on an unsubsidized total cost of ownership basis across mass-market vehicle classes,” said BNEF, in a summary report released last week.

No, EVs Aren’t an Eco Fad

Translation: It’s no longer a question of if sales of electric cars will take off, nor even when they will do so, but to what degree. Already, for the first half of 2017, about 44,000 battery electric vehicles were sold in the U.S., up 29 percent from last year. It’s still only 10,000 additional EVs in raw numbers, but significant as a trend-indicator.

Regulation will spur some growth, especially when it’s backed by government subsidies and tax credits. But falling battery costs are the major factor in these new, more optimistic projections, several of which foresee a day when EVs are cost competitive with traditional cars even without government holding its thumb on the scale. Bloomberg predicts that lithium-ion battery costs per kilowatt-hour will drop from today’s $273 to just $73 by 2030 and that, by 2040, electric vehicles will displace 8 million barrels of fuel per day (but add 5 percent to global electricity use).  Earlier this year, BNEF found that less expensive batteries will allow electric vehicles to have a lower overall cost of ownership (without incentives) by the mid-2020s. The International Council on Clean Transportation (ICCT) has pointed to a rise in global competition and battery production, which will continue to push electric-vehicle prices downward.

Chevrolet Volt battery packs

Chevrolet Volt battery packs. Researchers are projecting cheaper, more energy-dense batteries for EVs in the coming decades.

A Future of Gas Pumps and Charging Stations

There’s one more reality check to all of this. Despite at least one thought-provoking economic study suggesting even faster growth of electric vehicles if autonomous-vehicle technology moves rapidly, the vast majority of experts expect that vehicles with internal combustion engines will comprise the majority of sales for 20 years or more.

For awhile yet, through 2025, the number of plug-in hybrids (PHEVs) that employ both technologies will surge—and be a factor that muddies such calculations. But after that, Bloomberg suggests, low-cost, high energy-density batteries will tilt the market away from cars that can use fossil fuels.

Saudi Aramco and Royal Dutch Shell, however, recently both emphasized that gasoline will remain an essential part of the transportation economy for a long, long time. Royal Dutch Shell CEO Ben van Beurden said the transition to low-carbon technologies wouldn’t be a rapid revolution but something that will “take place over generations.” Charging up will just become the norm a little sooner than we thought.

from remotecar http://feedproxy.google.com/~r/caranddriver/blog/~3/zWPvMPGkDbc/

Even Big Oil Foresees an Explosion of Electric-Vehicle Sales

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