EVs to take 35% of the market by 2040

Bloomberg says electric vehicle (EV) sales worldwide reached just under half a million in 2015 – a 60% rise on the previous year.

Although electric-powered cars make up only 1% of the global vehicle fleet at present, it is predicted that worldwide EV sales will be more than 40 million by 2040, making up approximately 35% of all light duty vehicle sales.

The report’s authors say developments in battery technology are one of the key factors driving the downward trend in prices in the electric car market. “At the core of this forecast is the work we have done on EV battery prices”, says Colin McKerracher, a Bloomberg analyst.

“Lithium-ion battery costs have already fallen by 65% since 2010, reaching $350 per kilowatt hour (kWh) last year. We expect EV battery costs to be well below $120 per kWh by 2030, and to fall further after that as new chemistries come in.”

To date, two types of electric car have been produced for the mass market: a battery electric vehicle (BEV) is solely dependent on batteries for power, while a plug-in hybrid electric vehicle (PHEV) uses a combination of rechargeable batteries and a conventional engine as back-up.

Recent improvements in battery technology mean that a BEV can travel up to 200 miles without recharging.

China will drive future EV sales growth

Electric vehicle manufacturers say that as more sales are achieved, manufacturing costs will drop as economies of scale are achieved.

Various electric-powered sports models manufactured in the US and Europe have tended to grab the headlines recently, but the main sales growth in future is likely to take place in China. At present, the US continues to be the world’s biggest EV market, although it is Japan’s Nissan Leaf that heads electric car sales.

The government in China, faced with tackling serious pollution problems in many cities, is giving big subsidies to the country’s electric car manufacturers.

The world’s most populous country is also investing heavily in the necessary infrastructure for EVs. The State Council – the main law-making body in China – announced last year that facilities would be developed to handle up to five million plug-in vehicles by 2020.

It is also offering incentives to buyers, in terms of lower insurance premiums and road taxes, discounted charging facilities, and access to urban road networks when other vehicles are banned due to high pollution levels.

Xindayang, a Chinese manufacturer, is marketing electric vehicles in China at a cost of $10,000 – much cheaper than EVs elsewhere. The 14-year-old company is aiming to sell 100,000 units of its ZD D2 mini electric car in 2016. Its two factories have the capacity to produce 200,000 EVs a year.

“We are aiming to be the leader in what we call the ‘city mini EV market'”, Bao Wenguang, president of Xindayang Group, told China Daily. “The new-energy vehicles is urgently needed in China, and the country is taking environmental protection and the development of green energy seriously.”

And Chinese EV manufacturers have global ambitions. Faraday Future, a China-backed EV maker, recently announced plans to invest more than a billion dollars in a manufacturing plant in the US.

Kieran Cooke is a contributing editor at Climate News Network and former foreign correspondent for both the BBC and the Financial Times.

This article was originally published on Climate News Network. Some additional reporting by The Ecologist.