The Electric Car Revolution Is Accelerating
- Electric cars will be as cheap as gasoline models by 2025
- Battery manufacturing capacity will triple in the next four years
The charging port of Honda Motor Co.'s Fit electric vehicle.
Photographer: Andrew Harrer/Bloomberg
Electric cars will outsell fossil-fuel powered vehicles within two decades as battery prices plunge, turning the global auto industry upside down and signaling economic turmoil for oil-exporting countries.
The Bloomberg New Energy Finance forecast says adoption of emission-free vehicles will happen more quickly than previously estimated because the cost of building cars is falling so fast. The seismic shift will see cars with a plug account for a third of the global auto fleet by 2040 and displace about 8 million barrels a day of oil production—more than the 7 million barrels Saudi Arabia exports today.
“This is economics, pure and simple economics,” BNEF’s lead advanced-transportation analyst Colin McKerracher said before forecasts were published on Thursday. “Lithium-ion battery prices are going to come down sooner and faster than most other people expect.”
The forecast is BNEF’s most bullish to date and is more aggressive than projections made by the International Energy Agency. Surging investment in lithium-ion batteries, higher manufacturing capacity at companies including Tesla Inc. and Nissan Motor Co., as well as emerging consumer demand from China to Europe support BNEF’s projections, which also include: