Electric Car Sales Will Accelerate, But ICE Retains Big Global Share.
“The possible emergence of a “New Triad” – the convergence of the electric car, ride-hailing and car-sharing services, and self-driving autonomous vehicles could disrupt oil’s century-long dominance in transportation”
The surge of electric car sales is undeniable, but the noise generated by politicians and environmentalists cheering on the battery revolution hides a compelling fact; far from its imminent demise, internal combustion engines (ICE) are going to be around for a long time yet.
According to data provider IHS Markit on Tuesday, by 2050 between 60 and 80% of global new car sales will be electric (this comprises battery, plug-in hybrid and fuel cells), but ICE-based cars will still account for 1.9 billion vehicles on the road because of their longevity.
“It will still be a long road before they (electric vehicles) dislodge gasoline as the predominant fuel in transportation. Oil is no longer the unchallenged king in automotive transportation. But for some time to come its writ will still extend quite widely across the realm of transportation,” IHS Markit vice-chairman Daniel Yergin said in his new book “The New Map: Energy, Climate and the Clash of Nations”.
And as some politicians call for a ban on the sale of new ICE cars by 2035, or even 2030, IHS data shows ICE cars will retain a large share of the market, and begs the question, what will politicians do about it.
IHS data predicts by 2030, global electric sales – battery electric (BEV), Fuel Cells (FC) and plug-in hybrids – will account for 24.6% of the market, but ICE sales will notch up 75.4%. This includes hybrids, mild-hybrids, which use much battery power to improve ICE efficiency, and pure ICE vehicles. In Europe, electric sales storm to 38.7% by 2023, but that still leaves 61.2% of vehicles mainly powered by gasoline. In the U.S. by 2030, majority gasoline powered cars still account for nearly 80% of the market.
CO2 splurging ICE sales
Morgan Stanley updates
Investment bank Morgan Stanley has updated its forecasts for global BEV sales and now expects by 2030 in Europe a market share of 40% after an earlier 30% prediction, but that still leaves a huge amount of CO2 splurging ICE sales. In the U.S., Morgan Stanley sees BEV sales of 25%, up from a previous estimate of 14%, while globally it raises its outlook to 31% from 26%.
LMC Automotive said in a report published Tuesday, in North America by the early part of the next decade about half of vehicles will be electrified, while China and Europe go at a faster pace, that still leaves a massive amount of ICE-based vehicles.
“Our current forecast does not place the industry on track to achieve global net-zero CO2 emissions by 2050. More decisive action to limit sales of ICE vehicles would be necessary, in our opinion,” LMC said.
Look out for Auto-Tech
In his book, Yergin points out demand for electric vehicles is driven by government regulation not consumer demand. More demand for electric vehicles also creates problems and tricky decisions and challenges.
“Electric vehicles also bring their own set of challenges, particularly in the supply chain of some battery materials. Electric vehicle demand for lithium could rise 1,800% by 2030 and would represent about 85% of total world demand. Demand for cobalt, another essential element in batteries, could rise 1,400%. And more than 50% of global cobalt supply comes from one place—the Democratic Republic of the Congo,” Yergin said.
“The possible emergence of a “New Triad” – the convergence of the electric car, ride-hailing and car-sharing services, and self-driving autonomous vehicles could disrupt oil’s century-long dominance in transportation. This would give rise instead to a new trillion-dollar industry, Auto-Tech,” Yergin said.