If you had asked that question 10 or 20 years ago, you would probably have been laughed at. Many electric car experts were. However, the truth of the matter is that we are now living at a point in time when conventional passenger vehicle sales have reached their peak. It is predicted that electric cars and other vehicles will account for more than 50% of the sales of passenger vehicles worldwide by 2040.
This means that the sales of gas and diesel vehicles, that have already started to decrease, will continue to fall. As noted by BloombergNEF’s Electric Vehicle Outlook last year.
Startling figures also pinpointed that electric vehicles will account for as much as 56% of the sales of light commercial vehicles like trucks and vans throughout China, the US, and Europe over the next two decades.
The Reason For the Increase in Electric Vehicle Sales
The primary reason for the growth we are seeing in the electric vehicle market and the predicted growth over the next couple of decades is mainly driven by the price of electric vehicle batteries falling. With the introduction of China’s brand-new energy vehicle mandate and changes in fuel economy regulations, the electric vehicle market will continue to prosper.
These changes make electric cars much cheaper than the alternatives powered by internal combustion engines with the former set to outperform the latter in most markets towards the end of the 2020s. We have already seen reductions in the price of electric batteries. In fact, since 2010, the average price of lithium-ion batteries has decreased by as much as 85% thanks to a combination of improvements to the technology and the manufacturing economies of scale.
What this all Means
According to the BNEF report, the EV market will cause a decline in the demand for traditional road fuel by 13.7 million barrels each day, which is double what was predicted in 2018. This is largely because commercial vehicle electrification is happening quicker than the industry leaders thought it would and because the fuel efficiency improvements companies are putting into internal combustion engines are going to happen more slowly.
This will also mean that there is an increase of 6.8% in the demand for electricity throughout the world by 2040 and that the demand for lithium-ion batteries will also grow.
Although we are not suggesting that you should ditch your diesel car or look to someone other than a dealership like Diesel Secret to provide the fuel for your car, it is something to keep in mind. Besides, despite all these imminent changes, it seems as if the number of conventionally powered vehicles being used on the road will continue to increase until we reach the 2030’s and it’s then when we will see a significant drop in their demand and availability.
So, until then, there is no rush to change to electric cars, but it does make sense to be keenly aware of the time when this happens.