Spurred by falling battery prices, electric vehicles could reach the same price level as fossil fuel models in Europe by 2024 and in the US market by 2026, and could account for two-thirds of global car sales by 2030, according to new research.
A report from the Rocky Mountain Institute (RMI) predicts Thursday that the cost of batteries should halve this decade, from $151 per kilowatt hour (kWh) in 2022 to between $60 and $90 per kWh, making EVs “as cheap in be like petrol cars in every market by 2030 and cheaper to run.”
Batteries are expensive, accounting for around 40% of an electric car’s price tag, a price that has so far made them unaffordable for many consumers.
But those prices are steadily falling as automakers invest in new battery chemistry, materials and software to make more efficient electric vehicles, RMI managing director Kingsmill Bond told Reuters.
According to RMI’s analysis, the rapid growth of electric models in Europe and China “implies that electric vehicle sales will increase at least sixfold by 2030, to reach a market share of 62% to 86% of sales.”
Sales of electric vehicles in the European Union increased by almost 61% in July compared to the same month in 2022, accounting for 13.6% of all car sales.
The European Union wants to ban the sale of new fossil fuel models from 2035.
The United States has not yet set a date for ending sales of combustion engine models, but California and New York are both targeting 2035 to switch to selling only zero-emission models.
“It is not radical at all to see the continued exponential growth of electric vehicles,” RMI’s Bond told Reuters. “This is what you can expect.”
According to the RMI study, demand for automotive oil peaked in 2019 and will decline by at least 1 million barrels per day every year after 2030.
Research released simultaneously by Exeter University’s Economics of Energy Innovation and System Transition (EEIST) project also predicts exponential growth in electric vehicle sales.
It suggests that electric vehicles will reach a ‘tipping point’ in price parity with fossil fuel models as early as 2024 in Europe, 2025 in China, 2026 in the US and 2027 in India’ for mid-size cars, and even sooner for smaller vehicles. .”
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