Global electric-vehicle (EV) supremacy is expected to arrive by 2033 — five years earlier than previously forecast — as tougher regulations and rising interest drive demand for zero-emission transportation, a new study found.
Consultant Ernst & Young LLP sees EV sales outpacing fossil-fuel burners in 12 years in Europe, China and the US — the world’s largest auto markets.
By 2045, non-EV sales are seen plummeting to less than 1 percent of the global vehicle market, Ernst & Young forecast, using a prediction tool powered by artificial intelligence.
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Strict government mandates to combat climate change are driving demand in Europe and China, where automakers and consumers face rising financial penalties for selling and buying traditional gasoline and diesel-powered vehicles.
Ernst & Young sees Europe leading the charge to electric, with zero-emission models outselling all other propulsion systems by 2028.
That tipping point is expected to arrive in China in 2033 and in the US in 2036, Ernst & Young said.
The US lags the world’s other leading markets because fuel-economy regulations were eased during former US president Donald Trump’s administration.
Since taking office in January, US President Joe Biden has rejoined the Paris Climate Accord and proposed spending US$174 billion to accelerate the shift to EVs, including installing 500,000 charging stations across the country.
“The regulatory environment from the Biden administration we view as a big contributor, because he has ambitious targets,” Ernst & Young global advanced manufacturing and mobility leader Randy Miller said in an interview. “That impact in the Americas will have a supercharging effect.”
There also is a growing consumer appetite for EVs, from Tesla Inc’s hot-selling Model 3 to new electric models coming from legacy automakers, such as General Motors Co’s battery-powered Hummer truck and Ford Motor Co’s F-150 Lightning pickup.
Investments in battery-powered models total US$230 billion from the world’s automakers, consultant AlixPartners said.
“Many more models that are much more appealing are coming out,” Miller said. “You factor that with the incentives, and those are the raw ingredients that are driving this more optimistic view.”
The Ernst & Young study also sees the millennial generation, now in their late 20s and 30s, as helping to propel EV adoption.
Those consumers, driven by a virus-influenced rejection of ride-sharing and public transportation, are embracing vehicle ownership.
Thirty percent of them want to drive an EV, Miller said.
“The view from the millennials that we’re seeing is clearly more inclined to want to buy EVs,” Miller said.
Additionally, the combination of government purchase incentives for EVs and proposed bans on internal combustion engines are accelerating the adoption of battery-powered vehicles.
Europe is forecast to lead in EV sales volumes until 2031, when China is to become the world’s top market for EVs.
Vehicles powered by gasoline and diesel are still predicted to make up about two-thirds of all light vehicle registrations in 2025, but that would mark a decrease of 12 percentage points from five years earlier.
By 2030, Ernst & Young predicts that non-EV vehicles are to account for less than half of overall light vehicle registrations.
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