A new study by Ernst and Young finds that electric vehicle (EV) sales in the United States, Europe, and China will dominate the auto sector by 2033. The date is five years earlier than previously anticipated by the company. The study also predicts that by 2045, internal combustion engine (ICE) vehicles will fall to just 1% of global purchases.
Using an AI-powered predictive modeling tool, the researchers outlined the demand for mobility products and services through 2050. According to the study, sales of EVs in Europe will accelerate the quickest, outpacing all other powertrains by 2028. In the United States, EV sales volumes are forecast to outpace those featuring other powertrains by 2036.
Additionally, Europe's EV sales volume will outpace all other regions until 2031, when China is forecast to take the lead, which the researchers expect it to hold through 2050.
According to the study, helping to expedite the transition to EVs are millennials, who shifted their transportation habits during the COVID-19 lockdowns. Now in their 20s and 30s, these consumers moved from utilizing ride-sharing and public transportation to preferring car ownership. The vehicle of choice for most of these consumers is an EV.
"The view from the millennials that we're seeing is clearly more inclination to want to buy EVs," says Randall Miller, Ernst & Young's global advanced manufacturing and mobility leader. According to the firm's Mobility Consumer Index, nearly one-third of non-car owners plans to purchase a vehicle in the next six months. Millennials represent half of those consumers, thirty percent of whom say they'd prefer to buy an alternative powertrain vehicle.
According to Mr. Miller, this demand has substantial ramifications for the industry: "While the automotive industry has begun to more fully embrace the move toward electrification, the impact of this seismic shift is arriving sooner than many expected. This new outlook also has implications for governments and energy industries in terms of infrastructure and electricity generation and storage, and forward-looking organizations are already using this data to help ensure a smooth transition to this new EV-dominated market, which will be here much sooner than expected."
Among the automakers already transitioning to fully electric fleets by 2030 are Jaguar, Bentley, Volvo, and Mini. Volvo plans to outline its path towards electrification during its Tech Moment event on June 30, 2021.
Meanwhile, governments across the globe are gearing up for this change by investing in infrastructure and, in many cases, self-imposing bans on gasoline and diesel-powered engines. The UK will ban the sale of ICE vehicles beginning in 2030, while Norway will phase out gas-powered car sales by 2025.
In the U.S., President Biden proposed a $174 billion effort to speed up the shift towards electrification. According to Miller, these efforts will have enormous repercussions: "The regulatory environment from the Biden administration we view as a big contributor, because he has ambitious targets. That impact in the Americas will have a supercharging effect."