Electric Vehicle Fleet to Reach 100 Million by 2026 Stronger Action Needed for Net Zero, Reports BloombergNEF


According to BloombergNEF’s (BNEF) latest annual Long-Term Electric Vehicle Outlook (EVO), the number of electric vehicles (EVs) on the road is projected to exceed 100 million by 2026, with a further surge to over 700 million by 2040. This significant growth in EV adoption spans various sectors of road transport, from rickshaws to heavy trucks, and is particularly evident in emerging economies like India, Thailand, and Indonesia. BloombergNEF’s report calls for urgent policy action to reach net zero emissions while emphasizing the role of battery technology and the potential of electric vehicles in achieving a sustainable future.

The expanding EV market is accompanied by new economic opportunities, as the cumulative value of EV sales across all segments is projected to reach $8.8 trillion by 2030 and $57 trillion by 2050, according to BloombergNEF’s base-case Economic Transition Scenario, which assumes no new policies are implemented. However, to achieve long-term emission targets, urgent policy action is required from both policymakers and industry participants.

Aleksandra O’Donovan, head of electric vehicles at BloombergNEF, stressed the need for a stronger push in critical areas such as heavy trucking, charging infrastructure, and raw material supply. “Direct electrification via batteries is the most efficient, cost-effective, and commercially available route to fully decarbonizing road transport. Still, a stronger push is needed on areas like heavy trucking, charging infrastructure and raw material supply” said O’Donovan.

The Long-Term Electric Vehicle Outlook report also presents a Net Zero Scenario, which outlines a path consistent with a global fleet of zero-emissions-capable vehicles by the mid-century. While three-wheeled vehicles are fully on track to meet this ambitious scenario, buses, and two-wheeled vehicles are also close. However, commercial vans and passenger cars though gaining momentum, require additional policy support to remain on track. Heavy trucks, on the other hand, are significantly lagging behind the net-zero trajectory and should be a top priority for policymakers. Furthermore, the report emphasizes the necessity to streamline grid investments, grid connections, and permitting processes to support a significant number of charging points essential for the trucking transition. 

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The BloombergNEF report highlights several recommendations for governments and industry to accelerate the transition to electric vehicles:

  • Governments with mid-century net-zero goals should establish a phase-out date for the sale of new internal combustion vehicles no later than 2035 across all segments, supported by legislation and concrete policy measures with interim targets.
  • Stricter fuel economy and tailpipe CO2 emissions standards should be implemented, extending further in time than current rules. Urgent implementation of more stringent standards for vans, trucks, and other commercial vehicles is necessary in all markets.
  • Governments should establish recycling standards and requirements for EV batteries and support research on next-generation battery technologies. Funding and streamlined permits can facilitate the new supply of raw materials.
  • Governments should support domestic advancements in areas such as sodium-ion batteries, solid-state batteries, and next-generation anodes while investing in research and development of emerging battery technologies that reduce dependence on critical raw materials.
  • The establishment of dense public charging networks is essential to reduce consumer demands for extended EV ranges, which, in turn, alleviates pressure on battery raw material supplies. EV ranges have increased by 10% annually since in 2018. Even if this slows to 5% a year from 2023 to 2030 it adds nearly 50% more demand for lithium, nickel, and cobalt compared to a base case where BEV ranges remain flat.
  • Investments in clean power should be accompanied by investments in road transport electrification. Shifting more EV charging to midday, when solar generation is high, maximizes emissions benefits and lowers costs.

The BloombergNEF report also presents other key findings:

  • In the Economic Transition Scenario, there is a significant surge in EV sales. The number of passenger EV sales is projected to increase from 10.5 million in 2022 to 22 million in 2025 (26% of total sales), 42 million in 2030 (44% of total sales), and 75 million in 2040 (75% of total sales). Several countries, including the Nordics, China, Germany, South Korea, France, and the UK, are progressing even faster. By 2030, the global EV fleet is estimated to reach 244 million, and by 2040, it is projected to grow to 731 million (46% of the entire fleet). However, achieving the Net Zero Scenario requires an accelerated transition, with 298 million EVs on the road by 2030 and 1.1 billion by 2040.
  • Oil demand from road transport is nearing its peak, with the rise of EVs leading to a peak in overall road fuel demand in 2027. The United States and Europe have already experienced peak demand, while China’s peak is expected in 2024.
  • Sales of internal combustion vehicles peaked in 2017 and are now in a long-term decline. Despite the rebound in overall vehicle sales following the pandemic and supply chain challenges, sales of combustion vehicles are projected to be 39% lower than their peak by 2026.
  • Large investments are required in all areas of the battery supply chain, with an estimated $188 billion needed to be invested in battery cells and component plants by the end of the decade in the Economic Transition Scenario.
  • Lithium supply poses a concern regarding sufficiency, as demand is expected to increase by a factor of 22 times by 2050 in the Net Zero Scenario. However, aggressive uptake of sodium-ion batteries could reduce lithium demand by nearly 40% by 2035 compared to BNEF’s base case scenario.
  • Smaller vehicles offer greater climate benefits than larger ones. Consumer preferences for larger vehicles in the United States lead to larger battery packs, resulting in delayed upfront price parity compared to Europe.
  • The impact of autonomous vehicles remains uncertain in the global vehicle market. Progress is being made in autonomous vehicle (AV) technology, and the size of the global passenger vehicle fleet in 2050 depends significantly on AV uptake scenarios. The BNEF’s high adoption AV scenario could reduce the global passenger vehicle fleet size to 1.1 billion in 2050, down 30% from the base case scenario of 1.5 billion.
  • The additional electricity demand from EVs is part of a broader electrification push toward achieving net-zero targets. In the Economic Transition Scenario, EVs contribute about 14% to global electricity demand in 2050, while in the Net Zero Scenario, the figure is 12% despite the higher number of EVs on the road. This is due to the Net Zero Scenario’s inclusion of additional electricity demand from the electrification of heating, industry, and electrolyzer use for hydrogen production in other sectors.
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