The global road transportation market could hit carbon neutrality by the year 2050, according to a new analysis of the electric vehicle market by Bloomberg. Here are the key takeaways from the report.
What Happened: In 2021, electric vehicles had market shares of 1% for vans and trucks, 9% of passenger vehicles, 44% of buses and 42% of two and three-wheel vehicles according to the report.
Electric vehicles are helping to displace 1.5 million barrels of oil usage annually, equivalent to 3% of total fuel demand.
The increase of charging connectors being built, more demand for electric vehicles and a push for carbon neutrality are helping to power the segment going forward.
“Supply is already a larger constraint on adoption than demand in many countries,” the report says.
Sales of commercial electric vans and trucks more than doubled in 2021.
Related Link: Tesla Q1 Earnings Highlights: Electric Vehicle Maker Hits Record Revenue, Deliveries, Profits And Margins
What’s Next: Based on current trends and analysis, Bloomberg sees the electric vehicle market being worth $53 trillion from now until the year 2050. From 2022 to 2030, there is a $9 trillion market opportunity for electric vehicles.
The year 2027 could be the peak year for road transportation demand. The report lays out the case for the world to reach “net zero” carbon neutrality by the year 2050 for road transportation.
“The window for achieving net-zero emissions in the road transport sector by 2050 is still open, but urgent action is needed and there is no room for complacency,” the report says.
Market share for electric vehicles has to continue to rise to hit the goal, with 61% of all new global passenger vehicles needing to be electric by 2030, 93% by 2035 and 100% by the year 2038.
One area that has been slower to adopt electric vehicles is emerging markets due to cost. The report calls out India, Southeast Asia and other emerging markets as likely to represent a large portion of traditional automotive demand in the coming years.
Electric commercial vehicles could reach cost parity with diesel vehicles in the 2020s, which could help increase market share.
Going forward, Bloomberg expects buses and two- and three-wheel vehicles to continue to have the largest market share versus traditional vehicles in their respective sectors. The report sees 80% market share of electric vehicles for both sectors by 2040.
Along with a large opportunity for electric vehicle companies like Tesla Inc (NASDAQ:TSLA) based on the growth of the sector, Bloomberg sees rising demand and opportunity for battery suppliers and charging infrastructure companies.
“Between today and 2040, the cumulative investment in charging infrastructure exceeds $1 trillion globally. A big push is needed to scale up the industry quick enough so charging infrastructure is installed in time to support the expected electric vehicle fleet.”
The report calls the U.S. one of the most difficult challenges for charging infrastructure, needing a “six-fold increase in average annual public charging installations.”
