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0While EV adoption has been on a consistent rise, the planet is still overrun by other vehicles that have been around since the medieval era. The history of cars began with clockwork-run vehicles and has now ranged to sleek Electric Vehicles that are driving us into the future.
But how far away is the world from having EVs be the predominant option? EVs are growing sure, but many wonder if they will truly overrun gas guzzlers. This article explores the impact of EVs so far and studies its future footprint. Here, we analyze the factors driving EVs and whether they’re enough to meet the ambitious mission of replacing gas guzzlers with EVs.
Charging Ahead Confidently
The trends have made a bold assertion – Global EV sales surpassed 10 million units in 2022, with an expected growth to 14 million in 2023 (IEA). Meanwhile, by 2030, EVs are projected to account for 60% of new car sales globally, up from 14% in 2022.[1] In China, EVs already represent 30% of all new car sales[2], leading the global market. It seems like most consumers are skewing green and charging ahead with understandable EV fever. This has been encouraged by the rising tide of great design and the proliferation of charging stations around the world.
On the other hand, the cost of making EVs is going down as the category grows. The cost of EV batteries has dropped by 85% since 2010, from $1,200 per kWh to under $150 per kWh (BloombergNEF). By 2030, battery costs are expected to fall below $70 per kWh, making EVs price-competitive with ICE vehicles even without subsidies.[3] This is brilliant news for EV manufacturers and investors and the companies are sure to pass on some of this profit to the consumer. As more players arise – the cost of the product will likely be driven down as is often the case once competitors crowd the market.
The rise of charging infrastructure is the key. As more charging stations and portable charging options arise, more users are likely to take the leap and overcome their range anxiety. To that end, the number of public EV chargers globally increased by 55% in 2022, reaching over 2.7 million units (IEA). India plans to install 46,000 public EV charging stations by 2030, while China already leads with 1.8 million chargers in 2023. Fast-charging stations are expected to grow exponentially, cutting charging times to under 10 minutes by 2030. The faster the charge, the faster the adoption.
But is the mission too ambitious?
While demand for EVs is surging, bottlenecks in critical minerals like lithium, cobalt, and nickel could slow adoption. The global lithium market is expected to grow at a CAGR of 26.3% between 2023 and 2030, driven by battery demand.[4] Recycling initiatives and alternative battery chemistries are being explored to address resource constraints. Moreover, trust among the consumer will grow only gradually as more users convert. Many are holding back on account of the fact that the energy grid still predominantly runs on fossil fuels. So while, some experts believe EVs will outnumber ICE vehicles in new sales globally by 2030, full fleet replacement could take another 15-20 years, given the lifespan of ICE vehicles. On the other hand, other experts predict that by 2030, the global EV fleet is expected to reach 230 million vehicles, representing 30%-40% of the total vehicle fleet.[5] That still leaves EVs just under the majority.
The Future is Quite Frankly, Undecided
There is strong reason to believe that EVs might overtake their counterparts by 2030 especially as battery options proliferate the market. Global ICE vehicle sales are declining steadily, with a 1.5% CAGR reduction expected by 2030. Major automakers like Volvo, Ford, and Mercedes-Benz have pledged to transition to 100% EV production by 2030. One can be sure that by 2030, EVs could make up 40% of the global passenger car fleet, surpassing ICE vehicles in many markets. But will it overtake the gas guzzlers on the race to total market share? We’ll have to wait and watch.
In conclusion
The variables for EV adoption are firmly in its favour. From market growth to user adoption, the trends are on the up and up. However, ICE vehicles are still in the race. 2030 may be too ambitious a year for EVs to fully overtake gas guzzlers, but one can expect that EVs will have at least 40% of the market share for all vehicles based on expert predictions.
[2] https://www.iea.org/energy-system/transport/electric-vehicles
[3] https://www.iea.org/reports/global-ev-outlook-2024/trends-in-electric-vehicle-batteries
[5] https://www.iea.org/reports/global-ev-outlook-2024/outlook-for-electric-mobility
