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Electric vehicles are expected to account for 15 to 35% of global vehicle sales by 2040, one of several converging factors that could bring about the greatest economic transformation since the dawn of the automotive age.

Clare Goldsberry

December 9, 2016

2 Min Read
Major new study will examine forces reshaping the future of transportation

Electric vehicles could represent 15 to 35% of total new vehicle sales globally by 2040, according to business intelligence company IHS Markit (London). The findings are part of a new research project, "Reinventing the Wheel," that will be conducted over the first half of 2017.

“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,” said Dr. Daniel Yergin, Vice Chairman of IHS Markit, who wrote about the beginning of the auto age in his most recent book The Quest.

Image courtesy Håkan Dahlström/flickr.

While electric vehicles constitute a small percentage of the world’s vehicle sales—1% of the on-road fleet today—sales in 2016 are up more than 1000% since 2010, a trend that IHS Markit expects to continue. Electric vehicles could make up more than one-third of new vehicle sales in 2040.

“Significant advances in battery technology, financial support from governments, regulations and the 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.

Electric vehicle share in individual markets will vary based on these factors, IHS Markit said. For instance, in China and Europe—regions where policies are favorable to electric vehicles—IHS Markit estimates that electric vehicles could comprise more than half of new passenger vehicle sales in 2040.

The growth of electric vehicles is one of several forces reshaping the future of transportation that are the subject of "Reinventing the Wheel," a comprehensive new study to be completed in 2017. Other critical factors to be examined by the study include the potential impact of car sharing, ride hailing and autonomous vehicles on the transportation ecosystem.

“How and when this transformation takes shape will have a significant impact on the global economy and raises fundamental questions [related to the] oil and gas, automotive, chemical and electric power industries, as well as individual consumers,” said Tiffany Groode, study Co-Director and head of IHS Markit automotive scenarios.

"Reinventing the Wheel" will focus on the world’s largest automotive markets—the United States, Europe and China, as well as India—with projections out to the year 2040. The study will consist of two parts. Part 1 will include the development of scenarios representing potential paths for the future of the car, energy and chemicals industries. Part II will assess the impact, investment implications and strategic choices for those sectors.

About the Author(s)

Clare Goldsberry

Until she retired in September 2021, Clare Goldsberry reported on the plastics industry for more than 30 years. In addition to the 10,000+ articles she has written, by her own estimation, she is the author of several books, including The Business of Injection Molding: How to succeed as a custom molder and Purchasing Injection Molds: A buyers guide. Goldsberry is a member of the Plastics Pioneers Association. She reflected on her long career in "Time to Say Good-Bye."

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