Electric vehicle sales could reach 43 million by 2030, B of A says

Sales of electric vehicles (EVs) are likely to hit 3 million this year, but should skyrocket to between 21 million and 43 million by 2030, according to a new report from Bank of America.

“EV sales are expected to take off in the early 2020s when EV costs converge with internal combustion engine vehicles and car manufacturers ramp up production,” the bank states in a new report entitled: Emission Impossible? Global Climate Change Primer.

One of the driving factors will be battery density and costs. Between 2011 and 2018, battery density improved nearly 66%, while battery costs dropped 85% between 2010 and 2018, B of A reported.

Citing statistics from BloombergNEF (BNEF), the report forecast that battery costs are expected to fall another 50% by 2025, “driven in part by a 36% improvement in battery density.”

Battery packs in EVs can also be used in energy storage (ES) applications.

“Global battery supply capacity is key to ES being adopted more widely, in our view, and there could be further technology breakthroughs even if lithium batteries are the mainstay for now.” Looking ahead, there could also be breakthroughs with other battery technologies involving graphene capacitors, flow batteries and hydrogren storage, the report outlines.

The total cost of EV ownership is “already competitive against fossil alternatives, depending on miles driven and vehicle segment,” the report states.

EVs are become more cost-competitive, too. “For small hatchbacks and non-premium segments, EVs are not yet economical,” the report says, citing BNEF. “That said, as battery costs fall, electric cars are expected to be outright cheaper than ICE vehicles by 2025 … and this is before factoring in fuel savings for electric cars vs. fossil alternatives.”

Governments are supporting EV sales by proposing future bans on ICE vehicles, B of A notes. Norway has said it will ban ICEs by 2025, while the Netherlands, India and Sweden have said they will ban them starting from 2030, and France and Spain by 2040.

“While these ambitions are not binding and governments that promised these bans are likely to have changed by then, the moves indicate the general support for cleaning up transportation.”