If the price of EVs is what's keeping you from giving up your gas guzzler, you may not have to wait long for the prices to come down. In a study released today, Bloomberg New Energy Finance says that the cost of electric vehicles will continue to drop as the batteries that power them get cheaper. Even with lower oil prices, EVs will be able to compete with gasoline and diesel automobiles in terms of price by the mid 2020s. The BNEF report also forecasts that EVs will make up 35 percent of new "light duty vehicle" sales worldwide by 2040, or 41 million automobiles annually.
Even before 2025, the prices of EVs will come down, but the total cost of ownership will still be cheaper for fuel-burning cars. In terms of the environmental implications, if a quarter of the vehicles on the road in 2040 are EVs, that will replace 13 million barrels per day of crude oil. However, it means 1,900TWh of electricity will be required, or about 8 percent of global electricity demand from last year.
"In the next few years, the total-cost-of-ownership advantage will continue to lie with conventional cars, and we therefore do not expect EVs to exceed 5 percent of light duty vehicle sales in most markets -- except where subsidies make up the difference," said Salim Morsy, senior analyst and author of the study. "However, that cost comparison is set to change radically in the 2020s."