Electric Cars in 2025 and 2040: New Policies
With minimal policy intervention, electrification of cars is likely to remain too slow for the world’s climate action needs.
1. The International Energy Agency has multiple projections for future climate change policies and energy-related markets.
2. Their moderate forecast is called the “New Policies Scenario.” Under it, there would only be 280 million electric passenger cars on roads worldwide by 2040.
3. Electric cars would thus account for only 14% of the global passenger fleet of about 2 billion in 2040.
4. In that scenario, overall oil demand for cars would be lower by only 1.3 million barrels per day in 2040 than today – or 6% less.
5. By then, in China – already today the world’s largest car market – one in four passenger cars would be electric.
6. Over a shorter timetable, i.e. by 2025, less than a decade from now, the IEA projects there will be 50 million electric cars.
7. Broadly speaking, that would mean 5.3 million new cars a year would need to be electric.
8. The IEA assumes in the moderate “New Policies Scenario” that the unsubsidized cost for a fully-electric car’s battery will probably only decline by about half from 2015 to 2040.
9. The average battery costs in 2016 were less than $260 per kilowatt-hour (kWh) for plug-in electric hybrids and an estimated $200/kWh for fully electric cars.
10. That means a fully-electric car battery might cost around $12,000, although the price is declining.
Sources: The Globalist Research Center and the International Energy Agency