A new report by the Rocky Mountain Institute (RMI) predicts that electric vehicles (EVs) will have a global market share between 62-86 percent by 2030. The report also suggests that global oil demand for cars is on the decline and will see a significant decrease by the end of the decade.
The increase in EV sales over the past few years has been remarkable. According to the International Energy Agency, 14 percent of all cars sold in 2022 were electric, up from nine percent in 2021 and just five percent in 2020. This growth is largely driven by China, the largest EV market, and Northern Europe, with countries like Norway leading the way with a 71 percent EV market share. Other fast-growing markets include Indonesia, India, and New Zealand.
The main driving force behind this surge in EV adoption is economics. EVs have reached price parity with internal combustion engine (ICE) vehicles in terms of total ownership costs, and they are on track to achieve sticker price parity by 2030. Competition among carmakers is also contributing to this shift, as more EV battery and car factories are being built to meet the growing demand.
Policy measures, such as incentives from the Biden administration in the United States, have also fueled the expansion of the EV industry. Battery prices have significantly dropped by 88 percent since 2010, making EVs more affordable. The report highlights the need to address challenges related to upgrading electricity infrastructure, expanding charging networks, and improving battery recycling.
China’s success in EV adoption can serve as a model for other countries looking to transition to electric mobility. The report suggests that the “ICE age” is coming to an end, with demand for gas-powered vehicles declining by five percent annually since 2017. RMI projects a significant decrease in oil demand for cars and a quarter drop in global oil demand by 2030.
While the report makes optimistic projections for the future, it acknowledges that EV adoption rates can be influenced by various factors such as policy changes, consumer sentiments, and socio-political and economic disparities. However, with the current trends and developments in the EV industry, it is clear that electric vehicles are well on their way to becoming the dominant mode of transportation by the end of the decade.
Sources: Rocky Mountain Institute (RMI), International Energy Agency