A new study from the Boston Consulting Group predicts a somewhat slower uptake for all-electric vehicles than some earlier studies have — with the prediction being that all-electric vehicles (EVs) won’t gain “serious traction” in most global markets until after 2025, and that an only 14% of global new vehicle production will be EVs by 2030.
To be more specific, the new study predicts sales of all-electric vehicles (EVs) to rise to 6% by 2025, up from around 1% now — largely on the back of dropping prices, improving battery tech, and increasingly aggressive government mandates and/or incentives.
“Eventually, we’ll reach a point where we don’t need incentives anymore” to boost EV sales, stated Xavier Mosquet, BCG senior partner and lead author of the new work. Mosquet continued by arguing that by 2030 or so demand for EVs will be driven by market forces themselves rather than by regulation.
“BCG expects battery costs to fall rapidly after 2020, to as low as $80 per kilowatt-hour by 2025, compared with about $150 today and more than $650 in 2010. Total operating costs also will drop, BCG said, until the cost of owning and operating an electric vehicle over 10 years will fall below that of a comparable combustion-engine vehicles by 2021,” Reuters reports.
“In addition, more stringent environmental targets in many countries will push vehicle manufacturers to add some form of electrification, including hybrid electric-gasoline powertrains, to reduce exhaust emissions after 2020. Even as costs drop and more advanced technology is introduced over the next 12 years, BCG said it expects 86% of new vehicles to continue using some form of combustion engine by 2030.”
The report argues that one of the primary drivers of EV adoption, especially in the US, will be the growing use of on-demand taxi and ride-sharing services in large cities — owing to the fact that EVs will become more economical in such uses relatively fast thanks to relatively low maintenance and operational costs, and greater compatibility with self-driving tech.
Image by Tesla Shuttle
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