Move over, gasoline-powered cars. More electric vehicles are set to take the road, and adoption might be even faster than previous analyses have forecasted.
Just one year ago, the consultancy BCG projected that battery electric vehicles would make up 11% of global new light vehicle sales in 2025 and 45% in 2035. Now, the group’s latest analysis found that battery-powered EVs will amount to 20% of global sales by 2025 and 59% in 2035.
They are projected to be the most popular type of light vehicle sold by 2028, three years earlier than they found in 2021. What has happened in a mere 365 days to change the forecast so dramatically? Well, most importantly, regulators have gotten on board with EVs in a big way: Both President Joe Biden and his counterparts in the European Union have set more aggressive goals for cutting greenhouse gas emissions from the transportation sector.
“As EVs grow in sophistication, it’s getting easier for automakers to market these vehicles on more than simply their environmental merits,” the researchers wrote. And indeed, they noted that the last year has also seen significant shifts in consumer perception of EVs, mirroring the expanded offerings.
These factors have led to a decidedly optimistic outlook when it comes to EV adoption around the world. Gasoline-fueled vehicles are expected to make up just 10% of new vehicle sales globally by 2035, while battery-powered EVs are expected to make up 59%. Fuel cell EVs are not projected to see much of a surge, representing less than 1% of total sales globally. Hybrids — including plug-in, mild and full hybrids — are expected to make up the rest of the balance.
In the U.S., Biden has set a goal for half of all car sales to be EVs by 2030. While battery-powered EVs only made up 3% of the country’s new light vehicle sales in 2021, they are projected to hit nearly 47% in 2030, just a hair off the administration's target. Those sales could reach 68% in 2035. Sales of hybrid vehicles are expected to swell into 2030 before contracting, as EV sales replace the bulk of gasoline- and diesel-powered vehicle sales.
But the researchers are encouraging the administration to take more aggressive action: “The U.S. will also need to ban sales of new vehicles other than zero-emission ones by 2035—just as Europe is doing—to fulfill its 2050 net-zero pledge,” they wrote.
The report finds that the EU will lead in EV adoption (hitting 93% in 2035), closely followed by the U.S. and China; however, the rest of the world will progress more slowly. Outside of these regions, battery-powered EVs will account for only 35% of light vehicle sales by 2035.
Of course — as is the case in most sectors — these projections are complicated somewhat by the state of the supply chain; EV adoption can only progress as fast as the vehicles can make it off the factory floor. Minerals needed to create the batteries powering most EVs are facing a particular strain, and companies and governments alike will have to “take an innovative approach,” the researchers said, in order to meet rising demand.