A new report from Bloomberg New Energy Finance says that electric vehicles could account for more than 33% of all new vehicles sold (globally) by 2040. The report predicts that battery costs will fall and government policies in the U.S., Europe and China will also provide incentives for consumers to buy “electric.”
In the nearer term, the report says lower costs, and great financial incentives, could make electric vehicles cheaper to own and operate than gas-powered vehicles by 2022.
The big caveat in Bloomberg’s predictions is the assumption that oil prices will rise again. Bloomberg’s predictions are based on oil prices rising back to $50 to $70 per barrel by 2040 from their current price of around $30 per barrel. If oil prices stay around $20 per barrel, sales of electric vehicles would likely be slower.
Another unknown is what strides the auto industry will make in battery technology. Will solid state batteries or lithium batteries be the predominant technology? The uncertainty of which technology takes the lead (and when), could dramatically alter the predictions made by Bloomberg New Energy Finance.
The fact is that electric vehicle sales have a lot of room to grow. According to Fortune magazine, of the 80 million vehicles sold globally last year, only 450,000 were electric.