SoulMete - Informative Stories from Heart. Read the informative collection of real stories about Lifestyle, Business, Technology, Fashion, and Health.

‘Switch has been flipped’ on global EV growth, forecast says

[ad_1]

Battery electric vehicles will account for a majority of new light-vehicle sales worldwide by 2035 as government mandates begin and automakers roll out new models, according to a new forecast by Boston Consulting Group.

BCG anticipates 59 percent of all new vehicles sold worldwide will be BEVs by 2035, a double-digit upward revision from its 2021 estimate, which called for a 45-percent market share. Likewise, the consulting firm anticipates BEVs will comprise 20 percent of worldwide sales in 2025, up from last year’s forecast of 11 percent.

“We really think the switch has been flipped,” said Aakash Arora, managing director and partner at BCG. “It used to be a few years ago that for many companies, both OEMs and suppliers, EVs were a very important piece of their strategy, but still just a project. Now we’re seeing that EVs are the company, and that ICE is the project.”

BCG’s report said BEV models are likely to benefit in the coming years because of a significant shift away from ICE vehicles, as well as a “lower uptake” of mild hybrid EVs across the globe.

By 2035, gas-powered ICE vehicles and those that run on diesel are expected to account for just 10 percent of global vehicle sales, compared with 85 percent in 2021, according to the BCG report. The share of mild hybrids in the global marketplace is expected to grow from 3 percent last year to about 19 percent in 2025 before flattening out.

BEVs, meanwhile, are projected to grow from a 6-percent share in 2021 to 20 percent in 2025, 39 percent in 2030 and 59 percent in 2035.

The European Union is expected to lead the world in BEV uptake, driven by strict environmental regulations which come into effect over the next several years. BCG expects 93 percent of all new-vehicle sales in the region to be BEVs by 2035, compared with 9 percent in 2021.

While the U.S. is expected to lag behind the EU, the country’s BEV share should grow quickly, the report said, and be roughly in line with China’s growth. About 68 percent of new-vehicle sales in the U.S. are expected to be BEVs by 2035, up from 3 percent in 2021.

Arora said the U.S. is benefiting from a “fundamental shift” in the regulatory environment under the Biden administration, which has raised climate targets and set a goal of having half of all new-vehicle sales in the country be zero-emission by 2030.

“The U.S. is now very committed to electrification in terms of the emissions targets and what we see in funding coming in,” Arora said.

But significant challenges face the industry and government as both push to electrify, what BCG calls “the sting in the tail of this rosy outlook.”

Supply-chain constraints, geopolitical uncertainty and increased demand have pushed prices for lithium, nickel and other raw materials needed for battery production up significantly over the last two years, leading to higher battery costs.

BCG said the solution to those challenges is for producers to build new production facilities to meet demand, though that will “not be easy” given long lead times on such projects.

“As long as supply gaps persist, they could hamper the buildout of additional battery production capacity, hinder efforts to improve the battery range and lifespan of technologies, and delay — or even reverse — the declines in EV ownership costs,” BCG wrote in its report.

[ad_2]
Source link