Consumers would need far fewer vehicles to get around.
(Bloomberg) — Last week, we at BloombergNEF published our annual Electric Vehicle Outlook. Lead author Colin McKerracher highlighted some of the findings for Hyperdrive here.
There are many attention-grabbing numbers in the analysis, ranging from how road transport emissions peak in 2029, to how EVs of all types are already displacing 1.5 million barrels of oil a day. The substantial shifts outlined in the report will upset many industry incumbents, while also create a host of new opportunities.
In our economics-based modeling — which we’ve dubbed our Economic Transition Scenario — the cumulative value of EV sales across all segments hits $8.8 trillion dollars by 2030 and $57 trillion by 2050. In a scenario where all vehicles have zero tailpipe emissions by 2050 — our Net Zero Scenario — the mid-century figure jumps to more than $88 trillion.
Those amounts help explain why EVs and batteries are becoming central to many countries’ industrial policies, and why competition to attract investment is bound to increase in the years to come.
The gap between our Economic Transition Scenario and the Net Zero Scenario is smaller than in any of our previous reports. This is due to new stronger policy support in the US, early EV progress in a few emerging economies, growing global investment in charging infrastructure and the battery supply chain, and technology innovations like sodium-ion batteries. However, there are still areas where more work is required.
How vehicles are used can significantly impact how many are required on the roads. In this respect, autonomous vehicles, or AVs, are still a wildcard for the global vehicle market.
AVs drove over 80 million kilometers on public roads in 2022 in testing and operations. Fleet operators like Cruise, Waymo and Baidu are expanding services to new cities. While the current footprint of these services is still relatively tiny, the rollout of robotaxis could have huge implications for the size and distribution of the passenger vehicle fleet.
Due to the uncertainty around the speed of AV deployment, we’ve modeled out two scenarios in which the timeline of AV adoption varies significantly from our Economic Transition Scenario.
Depending on the region in which they operate, robotaxis can cover three to five times the annual distance of a private passenger vehicles, meaning that in a high AV adoption scenario, far fewer vehicles are required to offer the same level of mobility to consumers.
In our high-AV scenario, the 2050 fleet of passenger vehicles on the road would be 29% smaller than in our Economic Transition Scenario, which assumes that robotaxis will offer short- to mid-distance mobility mainly in urban areas, where population density bolsters the viability of these services.
In our low-AV scenario, on the other hand, the passenger vehicle fleet will continue to grow out to 2050, ending up at over 1.8 billion vehicles, more than 29% greater than in our Economic Transition Scenario.
There’s no doubt electrification will play a defining role in the next few decades of road transport. However, there are still many unanswered questions on the details, such as where and in what segments EVs take hold. How quickly robotaxis materialize is one of the more uncertain factors that will loom large over investment decisions at all levels of the transport value chain.
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