Low-decibel and torquey electric vehicles could be ubiquitous by the end of the decade. Zero emissions vehicles are on track to enjoy a global market share between 62-86 percent by 2030, as per Rocky Mountain Institute’s (RMI) report.
Global oil demand for cars is past its peak and will be in freefall by the end of the decade, as per RMI. The EV community is no stranger to the stark sales growth over the last few years. As per the International Energy Agency, 14 percent of all cars sold in 2022 were electric, up from nine percent in 2021, and just 5 percent in 2020.
The boom is led by China, the world’s largest EV market, and Northern Europe, where countries like Norway are leading the charge with 71 percent EV market share, as per EV Volumes data. China had a 27 percent EV market share, Europe 20.8 percent, and USA 7.2 percent in 2022. Among the fastest-growing EV markets are Indonesia, India, and New Zealand.
So what exactly is driving this surge? RMI’s report suggests that economics is the new driver. Price parity with internal combustion engine (ICE) vehicles has been reached already in terms of total ownership costs, and global markets are on track to achieve sticker price parity by 2030. The Tesla Model Y has already achieved price parity with its ICE-powered rivals.
Moreover, competition among carmakers is also driving change, with enough EV battery and car factories already under construction for ample supply by the end of the decade. In the US, incentives from the Biden administration’s Inflation Reduction Act, and the Bipartisan Infrastructure Law have also triggered a factory-building and retooling boom.
In addition to policy measures, battery prices have fallen by 88 percent since 2010, as energy density continues to increase by six percent annually. The graph below demonstrates how exponential the battery price drop has been.
It goes without saying that there are challenges ahead, especially in upgrading electricity infrastructure, charging networks, and battery recycling. However, success in China means solutions can be found in other countries, implying that the Asian giant can serve as a model nation for EV adoption, the report suggests.
Moreover, RMI forecasts that the “ICE age” is coming to an end. Demand for gas-powered vehicles peaked in 2017 and has been declining at a rate of five percent annually. RMI projects that oil demand for cars will fall by one million barrels per day by 2030, and global oil demand will plummet by a quarter.
The study makes bold projections for the future, but note that EV adoption rates can change due to unforeseen aspects like future policy changes, varying consumer sentiments, and socio-political and economic disparities. This particular report’s accuracy isn’t guaranteed. It is a rather optimistic outlook on what’s possible.
