October 24, 2016

The outlook for electric vehicles

Catavento contributes to the debate surrounding the profound changes that electric vehicles present for urban mobility and the decarbonization of society.

The paper “Perspectivas de inserção de veículos elétricos” (“The outlook for electric vehicles”) is the result of Catavento’s interest in understanding the potentially profound changes facing the automobile and transport industries. Its content comes from a thorough desk research of the available literature and focuses on the global dynamic at play in the growing sector.

Several trends appear to be contributing to the optimism surrounding electric vehicles. Some examples include social pressure for reduced CO2 emissions, strategic independence from fossil fuels and rapid advances in battery technology.

Although electric vehicles currently represent only 0.1% of the global fleet, year on year sales have grown at a 85% rate since 2011. This exponential pace has been driven by early adopters in countries such as the United States, China, Norway and Holland. The paper looks at some key factors that influence this growth rate, including public policy, planned investments in R&D, and consumers’ habits.

A series of possible scenarios for the future of the sector have been mapped out. The most aggressive, such as those of the IEA, are based on strict restrictions on global gas emissions. In one such scenario, the global vehicle fleet would be composed of 43% electric vehicles due to climate policies implemented to limit global temperature increases to +2°C.

Beyond politics, all reliable scenarios must consider the automotive industry’s massive investments in electric vehicles. Catavento estimates that these investments will total at least $50 billion by 2030.

Lastly, the consumer of the 21st century has made it clear that she is looking for a combination of connectivity, autonomy and new forms of consumptions, such as the sharing economy. All of this points to serious consequences for a wide range of industries – especially oil & gas and electricity generation – which need to be accounted for in long term planning.

We encourage you to read the full version of our study and send us your comments!