Electric vehicles are on track to dominate global sales of passenger cars by 2040, with a 57% market share, according to research firm BloombergNEF.
Electric buses are predicted to take an 81% share of municipal sales by the same date, BNEF said.
However, the research company emphasized that electrification has its limitations.
"Heavy trucks will prove the hardest segment for electrics to crack, with the latter's sales limited to 19% in 2040. Their use case will mostly be in shorter-distance applications. However, conventional heavy trucks on long-haul routes will also face other, non-electric competition -- from alternatives using natural gas and hydrogen fuel cells," the report said.
The role of shared mobility services such as ride-hailing and car-sharing will be important to the renewable scenario. These services account for less than 5% of all passenger miles travelled globally at the moment, but this is set to rise to 19% by 2040, according to the research paper. The BNEF team said it doesn't expect autonomous driving to have an impact on global transport and energy patterns until the 2030s.
Colin McKerracher, head of advanced transport for BNEF, said: "Our conclusions are stark for fossil fuel use in road transport. Electrification will still take time because the global fleet changes over slowly but, once it gets rolling in the 2020s, it starts to spread to many other areas of road transport. We see a real possibility that global sales of conventional passenger cars have already passed their peak."
Still, BNEF doesn't paint an altogether positive outlook for air quality improvement linked to electrification.
"The BNEF team sees the size of the global on-the-road conventional passenger car fleet continuing to grow until 2030. This means that road vehicle emissions will continue to rise for the next decade, followed then by a sharp fall in the years before 2040, which will only return them to levels similar to 2018," the report read.
The main driver for the electrification trend over the next 20 years will be further sharp reductions in EV battery costs, making electric cars cheaper than internal combustion engine (ICE) alternatives by the mid-to-late 2020s in almost every market, on the basis of both lifetime costs and upfront costs. Since 2010, the average cost of lithium-ion batteries per kilowatt-hour has fallen by 85% on a mixture of manufacturing economies of scale and technology improvements.
The BNEF report sees China continuing to lead in electric cars, accounting for 48% of all passenger EVs sold in 2025 and 26% in 2040 when other markets are catching up. Europe is set to pull ahead of the US as the number two EV market globally during the 2020s. Electrification in non-China emerging markets will be much slower, leading to a fragmented global auto market.
The oil industry will all be impacted by the rise of EVs. A year ago, BNEF estimated the impact on road fuel demand at 7.3 million b/d by 2040.
"However, it has now nearly doubled this to 13.7 million b/d, partly because of new forecasts for electrification of the commercial vehicle sector and partly, paradoxically, because ICE fuel efficiency is expected to proceed more slowly than previously thought. That means that every EV displaces a conventional car that would have used a greater quantity of road fuel," it added.
