Around half of all light-duty vehicles produced by automakers will be electric by 2040, S&P Global Platts Analytics said Wednesday, although EVs on the road will only be around 23% owing to fleet turnover.
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In its Long Term Electric Vehicle outlook Platts Analytics said EVs will start to gain market share as unit costs, primarily driven by the price of a battery pack, start to come down and make mass market ownership more viable.
"Platts Analytics anticipates that plug-in electric vehicle (PEV) adoption will accelerate in the long term, displacing internal combustion engine vehicles and eventually comprising a majority of global light duty vehicle sales," it said. "As PEV fleets grow, they will displace oil product demand while driving incremental power load demand."
These rates of electrification imply over 2,000 TWh of additional electricity load per year by 2040, it said.
A recent industry poll found a majority expected global EV penetration to be around 10%-30% by 2030, up from around 2% currently. An audience poll at an event during LME Week in October suggested expectations of an EV adoption rate of around 10%-12.5% by 2025.
Platts Analytics believes PEVs will become cost competitive with internal combustion engines by the mid-2020s.
Bernstein Investment Research said in a report published earlier this year it sees cost parity coming at around 2022-23.
BHP recently said costs need to be reduced to around $100/kWh from the current $150-$180/kWh.
However, Berenberg Bank battery metals analyst Asad Farid thought anyone expecting that target within the next five years was "very naive."
Looking at oil displacement, the research suggested that when combining light, medium and heavy duty EVs, around 4.5 million b/d of gasoline demand and 3.9 million b/d of diesel demand would be lost.
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