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2040 Is When EVs Will Outsell ICEVs According to Morgan Stanley Report

Given the laughable percentage of the total global sales they occupy today, it's hard to imagine that the day when EV sales will become greater than those of vehicles with internal combustion engines is even in sight. And yet some specialists believe we're just 23 years away from that happening.
Toyota charging 1 photo
By automotive industry standards, 23 years isn't even that long. With an average of 6 to 8 years per cycle, that means 3 to 4 different generations of the same model - it has taken manufacturers longer than that to implement much less significant changes in the past.

The report published by Harald C Hendrikse, Adam Jonas, and Victoria A Greer (via Electrek) is structured around three different scenarios: a basic one, one that's extremely positive toward battery-powered electric vehicles penetration, and finally one that will make every petrolhead on this globe rejoice.

The base one predicts a 16 percent penetration by 2030 with the important switch happening in 2040, when BEVs are expected to account for 51 percent of new car sales. Ten years later, that number would change to 69 percent.

The more optimistic one foresees a 60 percent penetration by 2040 and a dramatic 95 percent as soon as 2045. On the other end of the scale is the worst-case-scenario where BEVs reach a mere 9 percent by 2025, after which their sales start declining.

Here is the excerpt from the report detailing the three models: “Our base case BEV penetration assumes that the 16% penetration in 2030 accelerates to 51% by 2040 and 69% by 2050. In our bull case, based on an even more aggressive regulatory regime to accelerate the reduction of emissions, we get to 60% penetration by 2040 and 90% by 2045. Our bear case BEV penetration model assumes that BEV development proves too expensive, or technically not viable and governments are forced to delay regulatory tightening. In this case, new BEV models grow global share to 9% by 2025, but fade after that, as they have done previously.

Despite currently accounting for a measly one percent of the market, when BEVs sales do take off - or if they do - the growth is going to be exponential. 2020 already promises to be the year when most traditional manufacturers launch their first real electric vehicles (no offense to all their existing models), giving anyone interested a lot of options. If they manage to set up a decent infrastructure by then and if the battery price also continues to drop, it's hard to see a reason for EVs not to succeed. Our guess is that the switch will either happen sooner than 2040 or not at all.


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