Low battery prices are killing the age of gasoline cars faster than anyone expected, according to a new report from Bloomberg NEF (BNEF). That means that peak oil demand will also come sooner than expected, which in turn means that ambitious climate targets will be more affordable than previously thought.
"Sales of passenger cars with internal combustion have reached their peak, and it is possible that they never recover," concludes the publication Perspectives of electric vehicles 2019 of BNEF.
Sales of electric vehicles (EV) are now seriously consuming sales of vehicles with internal combustion engines (ICE), and this trend is expected to accelerate in the coming years.
As a result, BNEF projects that oil demand will reach its peak in 2028 for passenger vehicles and in 2035 for commercial vehicles. "We expect demand in both sectors to increase by 2030," a BNEF spokesperson told ThinkProgress in an email.
Therefore, the rapid increase in sales of EV will cause a slowdown, a peak and then a drop in oil consumption. And that means that oil prices and the value of investments in oil companies will fall.
Other findings in BNEF's full report are equally surprising. For example, the rate of adoption of electric vehicles is so fast that electric vehicles will reach 50% of new car sales in China and Europe around 2030, at which time electric vehicles will represent around 40% of US passenger vehicle sales UU
What is driving the rapid adoption of EVs?
In the first place, it is the strong and continuous fall in the prices of batteries. From 2010 to 2018, the average package of lithium-ion batteries fell by 85%, from $ 1,160 to $ 176.
BNEF projects that the sharp drop in prices will continue, since the average prices of the battery packs "will reach $ 87 / kWh in 2025 and $ 62 / kWh in 2030", an additional fall of 65% with respect to the prices of 2018 .
These price drops mean that the economy of owning an EV will quickly exceed that of having a car with a gasoline engine.
In three years, EVs will actually be cheaper in advance than combustion vehicles, which will make EVs the increasingly attractive option. After all, they are already superior to gasoline cars in many key ways: EVs have faster acceleration, lower maintenance costs, zero exhaust emissions and a much lower fuel cost per mile than gasoline cars, even when they run on carbon-free fuel.
In addition, as batteries become cheaper, EV ranges become longer: 300, 400 or even 500 miles.
The time needed to charge a battery is also decreasing rapidly. Some chargers take only 20 minutes to charge an EV, and new chargers can cut that time by half. Ultimately, next-generation batteries can be charged in three to five minutes.
This rapid adoption of batteries and electric vehicles, combined with the acceleration of falling prices and adoption rates of renewable energy, means that the world can decarbonize the transport sector faster and cheaper than we thought a few years ago. .