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Electric — 84% Of New Bus Sales & 28% Of New Car Sales In 2030 (BNEF Forecast)

A new Bloomberg New Energy Finance report focused on electric buses (e-buses) forecasts a surge in electric bus sales to 84% of global new bus sales by 2030. The report forecasts that electric cars will follow, but at a slower pace, reaching 28% of new car sales in 2030.

A new Bloomberg New Energy Finance report focused on electric buses (e-buses) forecasts a surge in electric bus sales to 84% of global new bus sales by 2030. The report forecasts that electric cars will follow, but at a slower pace, reaching 28% of new car sales in 2030.

The optimistic growth forecasts for electrified vehicles are noted with a large asterisk, highlighting the risk of nearly single-sourced cobalt. While cobalt is not the primary constituent in EV batteries, it is a key ingredient in most lithium-ion battery chemistries, including those produced by Tesla and Panasonic for use in Tesla’s energy and automotive products — although, Tesla is moving away from such use.

Looking at near-term EV adoption, Bloomberg New Energy Finance shows sales climbing steadily from 2017’s 1.1 million global sales to 11 million per year in 2025, when the truly exciting growth fires off. Bloomberg New Energy Finance forecasts that from 2025 to 2030, EV sales will climb from 11 million per year to a staggering 30 million per year as lower battery pricing and scale allow EV manufacturers to hit price parity with internal combustion engine vehicles “at the register” — not even taking into account savings from lower fuel and maintenance costs. Bloomberg New Energy Finance expects this trend to continue, hitting 60 million vehicles in 2040, which is projected to be 55% of global car sales.

Source: Bloomberg New Energy Finance

Near-Term Trends

E-buses will be one of the first categories to move, as their scale and much higher utilization allow them to hit pricing parity with internal combustion vehicles next year according to BNEF. “It shows electric buses in almost all charging configurations having a lower total cost of ownership than conventional municipal buses by 2019.” China is leading the charge into e-buses with more than 300,000 in operation today … with more than 16,000 of those in Shenzhen alone.

Total cost of ownership can be an odd beast and estimating it relies on various assumptions. In a 2013 interview with CleanTechnica and EV Obsession, the head of Barcelona’s transit agency told us that their first few months of testing a BYD electric bus showed that the electric bus was already cost-competitive with conventional buses on a total cost of ownership basis. Batteries costs have dropped dramatically since then.

A persistent question brought up by electrified transportation skeptics is whether or not the grid can supply the power needed for the EV revolution. Bloomberg New Energy Finance forecasts that in 2040, plug-in vehicles will draw a mind-boggling 2,000 TWh, amounting to an increase of a 5,479 GWh per day. These numbers sound staggering when taken out of context but only amount to an increase of 6% in global electricity demand — and that doesn’t take into account reduced need for electricity for various stages of the oil extraction, transport, and refining process.

The EVs powered by this electricity will offset 306 million gallons of oil per day … or 111.7 billion gallons of oil per year. These figures really help put the “keep it in the ground” argument in perspective, as that’s only a portion of the oil we are burning and using today for transportation.

Shared Mobility

Shared mobility services like Uber, Lyft, Ola, and Didi have taken hold and replaced taxis in many cities around the world as millennials ditch car ownership for lower cost on-demand service. Autonomous vehicle technology threatens to shatter the young shared mobility economy and instead replacing it with a “Transportation-as-a-Service” (TaaS) model comprised largely of autonomous vehicles.

Interestingly, the report forecasts that shared mobility vehicles will continue to be a “small but growing element” of the overall mix, in sharp contrast with many connected car experts who are bullish on autonomous, connected, shared mobility becoming the ubiquitous solution nearly instantaneously as soon as the first fully autonomous vehicle is approved by authorities.

Bloomberg New Energy Finance sees this trend taking hold over a longer timeframe. Ali Izadi-Najafabadi, lead analyst for intelligent mobility at Bloomberg New Energy Finance, said of the transition, “We predict that the global shared mobility fleet will swell from just under 5 million vehicles today to more than 20 million by 2040. By then over 90% of these cars will be electric, due to lower operating costs. Highly autonomous vehicles will account for 40% of the shared mobility fleet.”

This raises the question: if autonomous vehicles are 10× cheaper than a shared mobility service with a human driver, and 10× safer, why would anyone use the 60% of shared mobility vehicles driven by humans?

To Cobalt or Not To Cobalt

The new Bloomberg New Energy Finance report cites cobalt as a possible supply chain bottleneck that has the potential to slow the growth of EVs in the coming years. Salim Morsy, senior transportation analyst, related that, “While we’re optimistic on EV demand over the coming years, we see two important hurdles emerging. In the short term, we see a risk of cobalt shortages in the early 2020s that could slow down some of the rapid battery cost declines we have seen recently.” (We got some exclusive commentary on this topic from various BNEF experts and Tesla a few months ago if you want to dive in much deeper.)

Elon Musk spoke about the cobalt used in Tesla’s batteries on a recent conference call with analysts (as recorded by Bloomberg), saying that, “We think we can get cobalt to almost nothing.” Tesla’s chief technology officer JB Straubel commented that the company’s focus on reducing the usage of cobalt is part of an overarching drive to reduce the cost of batteries and that it has been going on “for literally several years now, and this has been extremely helpful in the overall cost per kilowatt-hour, especially with recent commodity price movements.”

Cobalt is nearly single-sourced from the Democratic Republic of the Congo, which is fraught with political and socioeconomic challenges that add further risk to the global supply of cobalt. A recent ebola outbreak adds further instability to the ongoing infighting in the troubled nation.

The lithium-ion batteries themselves are currently produced in China, which maintains a 59% share of global production capacity in 2018. This is expected to increase to 73% as China continues its early lead in plug-in vehicle manufacturing and sales.

Summary

We are certainly headed towards a more sustainable, more electrified future. The only question is about what path cities, states, nations, and nation-states will take to get there. A desire to reduce emissions will motivate some countries more than others while a few will move more aggressively into electrified vehicles as a means of establishing energy independence for the next generation.

“Developments over the last 12 months, such as manufacturers’ plans for model roll-outs and new regulations on urban pollution, have bolstered our bullish view of the prospects for EVs,” commented Colin McKerracher, Bloomberg New Energy Finance’s lead analyst on advanced transportation.

Economies made and broken by oil prices will give way to economies that boom or break on mining of lithium, cobalt, and nickel … and the subsequent recycling and repurposing of lower energy density batteries from the last generation of EVs.

Transit models will evolve as the habits of baby boomers, gen X’ers, and millennials ebb and flow from private vehicle ownership to mass transit and eventually shared, autonomous mobility.

For more information about Bloomberg New Energy Finance’s current perspective on plug-in vehicles, head over to the official BNEF 2018 Electric Vehicle Outlook.

 
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