According to a new analysis by Ernst & Young Global Ltd. (EY), electric vehicle (EV) sales are predicted to outpace all other powertrain types in the US, China, and Europe three years sooner than previously expected. The latest projections indicate that EV sales in Europe will surpass those of other powertrains by 2027, followed by China in 2032 and the US in 2032. Furthermore, by 2040, internal combustion engine (ICE) vehicle sales are predicted to shrink to less than 1% of global sales, five years faster than previously anticipated.
EY’s analysis also highlights the shift in consumer demand, backed by government policies and incentives, and the aggressive electrification targets of original equipment manufacturers (OEMs). These factors have accelerated the transition to EV adoption in all three regions, resulting in substantial investments in setting up EV infrastructure and transitioning from fossil-fuelled mobility ecosystems to electric ones.
The report further mentions that Europe is expected to lead the EV sales volume until 2024, with China taking the lead from 2025 onwards. The US will also see large population states leading the way, although the country needs to deal with supply chain issues, recessionary headwinds, and a focus on charging infrastructure and in-country battery development to meet the 2030 target of 50% of sales being EVs.
Randall Miller, EY Global Advanced Manufacturing & Mobility Leader, noted that the EV revolution continues to gain momentum despite a series of finance and energy-related headwinds in the last year. He stated, “the point at which we think EVs will come to dominate the marketplace has actually moved forward.” However, he also warned that Europe’s energy crisis might require more government assistance to maintain the current pace of transition towards EVs.
To forecast this transition to EVs, EY’s automotive analysts and data scientists built the EY Mobility Lens Forecaster. The AI-powered forecasting tool uses a neural network model to analyze various variables that influence demand and supply for mobility. These variables include consumer behavior, regulatory trends, technology evolution, and manufacturers’ announced strategies.
In conclusion, EY’s analysis indicates that the electric vehicle market is expected to continue its growth trajectory, and sales are projected to outpace all other powertrain types. The acceleration towards electrification is driven by several factors, including consumer demand, government policies and incentives, and the aggressive electrification targets of original equipment manufacturers. It is clear that the automotive industry is moving towards a more sustainable, carbon-neutral future, and EVs will play a significant role in achieving this goal.