Government electrification plans aim to cut greenhouse gas emissions significantly, potentially saving 2 Gt CO2 by 2035 on a well-to-wheel basis. Globally electrifying road transport could greatly reduce emissions over the next few decades. Although additional emissions from electricity generation for electric vehicles (EVs) need monitoring, these are far outweighed by the reductions from switching to EVs. In the Stated Policies Scenario (STEPS), using EVs instead of internal combustion engine vehicles (ICEVs) could avoid over 2 Gt of CO2 equivalent (CO2-eq) by 2035, with additional emissions from electricity generation for EVs being much smaller, around 380 Mt CO2-eq. This results in a net saving of 1.8 Gt CO2-eq.
Decarbonizing power generation further could deliver even more emission reductions in the Announced Pledges Scenario (APS), where net emissions avoided by switching to electric vehicles might reach around 2 Gt CO2-eq by 2035. However, there’s a significant gap between current pledges and what’s needed to align with the Net Zero Emissions (NZE) Scenario. In 2030, the NZE Scenario avoids 40% more emissions compared to the APS, which itself avoids only about 5% more emissions than the STEPS. By 2035, the gap between the NZE and APS emissions savings narrows to less than 35%, while the APS net emissions reductions increase to over 10% relative to the STEPS.
Current policies and announced pledges aren’t yet aligned to achieve net zero emissions by 2050, highlighting the need for greater ambition in policy and corporate decision-making. In 2023, Chinese passenger light-duty vehicles (LDVs) accounted for about 35% of global road transport avoided emissions, showing the benefits of switching to EVs sooner. By 2035, this share will fall to 25% in the STEPS. By then, trucks will account for almost 15% of avoided emissions globally and buses nearly 5%. Early adoption of electric two/three-wheelers (2/3Ws) meant they accounted for almost 10% of avoided emissions in 2023. Although this share will fall to 5% by 2035, electric 2/3Ws will provide substantial cumulative emissions savings in the interim.
Retail price parity between electric and ICE cars in some regions and segments by 2030, combined with stronger policy support for car electrification, means the LDV segment is more closely aligned with the NZE Scenario than other vehicle segments. In the STEPS and APS, the LDV segment achieves over 80% of the net avoided emissions seen in the NZE Scenario by 2035. In contrast, buses are the least aligned with the NZE Scenario, with the STEPS achieving only 20% and the APS 30% of the emission reductions seen in the NZE Scenario. For trucks, the STEPS achieves almost half of the net avoided emissions seen in the NZE Scenario by 2035, while the APS delivers almost 70%, reflecting strong policies in the United States, European Union, and other countries.
A battery electric car sold in 2023 will emit half as much as a conventional equivalent over its lifetime. There are substantial emissions benefits to switching to EVs when considering lifecycle emissions, which include emissions from vehicle production and well-to-wheel emissions. In both the STEPS and APS, these benefits increase over time as the electricity mix becomes more decarbonized. Globally, in the STEPS, the lifecycle emissions of a medium-size battery electric car are about half of those of an equivalent ICEV, more than 40% lower than an equivalent hybrid electric vehicle (HEV), and about 30% lower than a plug-in hybrid electric vehicle (PHEV) over 15 years of operation or around 200,000 km. These emissions savings increase by about 5 percentage points in the APS due to faster grid decarbonization.
Battery production emissions will also fall by about 10% by 2035 due to grid decarbonization in the APS. Many consumers are choosing larger vehicles, but the efficiency of an electric powertrain mitigates much of the negative impact of larger vehicles. While some large ICE SUVs can emit up to 50% more emissions than a medium-sized ICE car, a large battery electric SUV emits only around 20% more than a medium-sized BEV over its lifetime. Choosing a battery electric SUV over an ICE vehicle represents a lifecycle emission saving of about 60%. Even compared to a medium-sized ICEV, a battery electric SUV results in 40% lower lifecycle emissions.
In the United States, the potential for emissions savings from BEVs is relatively high due to high annual mileage and rapid power grid decarbonization. By 2035, the emissions intensity of the US average grid mix will fall by 70% in the STEPS. Consequently, the lifecycle emissions of a BEV purchased in the United States today are around 45%, 60%, and 65% lower than those of a PHEV, HEV, and ICEV, respectively. Compared to an ICEV, this amounts to a net lifetime savings of nearly 50 t CO2-eq for a medium-sized BEV.
The importance of vehicle lifecycle emissions is increasingly recognized in policy. The EU battery regulation requires a battery passport that includes battery carbon emissions. In 2023, France announced new eligibility rules for EV subsidies, setting a cap on the carbon intensity of vehicle production to promote lower-emission vehicles. Brazil has issued a provisional measure to establish a program with minimum recycling requirements for vehicle manufacturing and reduced taxes for companies with lower emissions. The EU HDV CO2 standards include a review clause to develop a common methodology for assessing and reporting full lifecycle CO2 emissions of new HDVs.
