Plug-in electrified vehicle sales will skyrocket in the next quarter century, according to a new study by IHS Markit. The global consulting and analytics firm predicts PEVs will make up 15-to-35 percent of global new vehicle sales by 2040. While these vehicles only make for one percent of global auto sales, sales in 2016 are up more than 1,000 percent since 2010. IHS Markit expects that trend to continue, potentially comprising more than a third of new vehicle sales by that year.
Daniel Yergin, vice chairman and author of The Quest, which tracks the history and influence of the oil industry, thinks PEV sales growth will be similar to what happened with gasoline-powered cars over a hundred years ago.
“The key question is whether we are approaching a transformative shift akin to the first decade of the 20th century, when the internal combustion engine, cheap gasoline, bicycle technology and mass production combined to usher in the automotive age,” Yergin said in a press release. “Converging developments along multiple tracks are leading us to focus on this important question.”
The consulting firm sees breakthroughs in battery technology, government support, and growing interest in purchases by the millennial generation, as major economic trends affecting sales growth. That will vary by country and region, with the report anticipating China and Europe to see an even larger spread. IHS Markit estimates that PEVs could comprise over half of new passenger vehicle sales in 2040 in these markets with their favorable policies.
“Significant advances in battery technology, financial support from governments, regulations and values of millennials will be key factors leading to increases in electric vehicle adoption,” said Jim Burkhard, study co-director and chief of research at IHS Markit for crude oil markets and energy scenarios.
The study findings on PEVs are part of a new research project, Reinventing the Wheel, that will be conducted over the first half of 2017. The project is a multi-client research initiative tapping into the consulting firm’s expertise in chemical, automotive, and energy analysis. Other market factors to be examined by the study include the potential impacts of carsharing, ride-hailing, and autonomous vehicles on the “transportation ecosystem.”
“How and when this transformation takes shape will have significant impacts on the global economy and raises fundamental questions for the oil and gas, automotive, chemical and the electric power industries, as well as individual consumers,” said Tiffany Groode, study co-director and head of IHS Markit automotive.