Analyst cautions that demand for fossil fuel from automotive market will only drop by 24 per cent by 2050, despite bullish predictions for EV market
Global sales of zero emission and plug-in hybrid vehicles are set to outstrip those of internal combustion engines (ICEs) for the first time in 2047, powered largely by by soaring sales of electric vehicles (EVs) in China, Europe and North America, according to Wood Mackenzie.
Research published by the energy analyst this week predicts that by 2050 EVs will number 700 million worldwide, as well as making up 48 per cent of total vehicle sales that year, or 62 million vehicles. Meanwhile, fuel cell vehicles will comprise three per cent of sales and plug-in hybrid vehicles five per cent, it said.
By mid-century, 86 per cent of automobile sales in Europe, 81 per cent of sales in China and 78 per cent of sales in North America will be EVs, it said.
In the shorter term, meanwhile, Wood Mackenzie predicts EV sales in China, Europe and the US will hit seven million a year by 2025, before doubling to 15 million a year by 2030 as price tags drop due to economies of scale, cheaper battery technology, and impending bans on fossil fuel vehicle sales.
Residential chargers will be the primary mode of powering up EV batteries, it adds, making up nearly 90 per cent of a projected 416 million charging outlets installed worldwide by 2050.
However, the research cautions that despite bullish predictions for the EV market in the coming decade and beyond, global oil demand is set to fall by just under a quarter between now and 2050 due to a slow phase-out of fossil fuel vehicles and increased demand for pertrol and diesel cars in emerging economies. Roughly 44 per cent of vehicles sold worldwide will be still powered by fossil fuels in 2050, it estimates.
"Despite the growing dominance of EVs, global oil demand from light-duty vehicles is projected to reduce by only 24 per cent over the next 30 years," said Wood Mackenzie analyst Ram Chandrasekeran. "Slow erosion of internal combustion engine (ICE) stock and an increased demand from emerging economies are the main reasons for this lethargic drop."
Chandrasekeran said countries and regions looking to stimulate EV sales growth should emulate the emissions regulations enacted in many regions of western Europe, which he said had helped EV sales to surge in 2020 despite the broader slump seen across the automotive market in the fallout from the pandemic.
"In 2020, global EV sales surged 38 per cent despite a decline of 20 per cent in all car sales," he said. "Emissions regulations in western Europe were successful in doubling EV adoption despite the crippling coronavirus pandemic. This provides a roadmap for other countries and regions with similar goals to stimulate EV sales growth."
Wood Mackenzie predicted that established automakers such as Volkswagen, General Motors, Fiat-Peugeot, Renault-Nissan, Tesla and Hyundai would retain their position as market leaders, making them responsible for a large proportion of the future EV fleet. "Most automakers are a few years behind Tesla in terms of technology and efficiency," Chandrasekeran said. "However, they can quickly outgun Tesla when it comes to manufacturing capacity and quality."
The analyst's latest EV outlook comes just weeks after General Motors, the largest automaker in the US, announced it would stop selling fossil fuel-powered light-duty vehicles by 2035 and offer 30 all-electric models globally by 2025.
For commercial vehicles, meanwhile, Wood Mackenzie predicts that EVs will account for around three million on the roads by 2025, tripling to nearly nine million by 2030, with electric buses and light trucks leading the shift. Overall, global stock of commercial EVs will grow to 54 million by mid-century, it said, with 6.4 million units sold annually.