Hello,

We noticed you're browsing in private or incognito mode.

To continue reading this article, please exit incognito mode or log in.

Not a subscriber? Subscribe now for unlimited access to online articles.

Sustainable Energy

The 2020s Could Be the Decade When Electric Cars Take Over

A new analysis of battery costs predicts that EVs will start making significant gains in market share in the next few years.

Electric vehicles will become a more economical option than internal-combustion cars in most countries by sometime next decade, claims a new report by energy data analytics firm Bloomberg New Energy Finance (BNEF).

The reality, though, is that it’s highly uncertain if or when EVs will start gaining significant market share. That’s in part because it may not be so predictable how the costs of energy technologies will fall, and it’s hard to forecast what will happen to oil prices either.

The Organization of Petroleum Exporting Countries (OPEC), for its part, declared in December that without a technology breakthrough, EVs “are not expected to gain significant market share in the foreseeable future.” That would seem to be a safe bet; EVs currently make up less than 1 percent of the world’s car market.

The BNEF analysis is much more optimistic, to say the least, projecting that 35 percent of the world’s new cars will run on electrons by 2040. The bullish outlook is based largely on the speed at which costs for lithium-ion batteries are falling. Costs have dropped 65 percent since 2010, reaching $350 per kilowatt-hour last year. According to BNEF, that puts unsubsidized EVs on pace to be cost-competitive with comparable gas cars within six years. The group predicts that by 2030 the cost will be down to $120 per kilowatt-hour.

That’s more or less in line with an extensive analysis published last year by academic researchers, who found that battery costs are falling even faster than the most optimistic analysts predicted just a few years ago. Those researchers concluded that reaching $230 per kilowatt-hour is realistic by 2017, and that at $150 per kilowatt-hour we might see “a potential paradigm shift in vehicle technology.”

In 2015 sales of EVs grew some 60 percent. If that trend continues, and battery prices keep falling as quickly as they are, the 2020s could bring a shock  to the global oil industry.

(Read more: Bloomberg, BNEF, “Inexpensive Electric Cars May Arrive Sooner Than You Think”)

Keep up with the latest in sustainable energy at EmTech MIT.
Discover where tech, business, and culture converge.

September 17-19, 2019
MIT Media Lab

Register now
More from Sustainable Energy

Can we sustainably provide food, water, and energy to a growing population during a climate crisis?

Want more award-winning journalism? Subscribe to MIT Technology Review.
  • Print + All Access Digital {! insider.prices.print_digital !}* Best Value

    {! insider.display.menuOptionsLabel !}

    The best of MIT Technology Review in print and online, plus unlimited access to our online archive, an ad-free web experience, discounts to MIT Technology Review events, and The Download delivered to your email in-box each weekday.

    See details+

    12-month subscription

    Unlimited access to all our daily online news and feature stories

    6 bi-monthly issues of print + digital magazine

    10% discount to MIT Technology Review events

    Access to entire PDF magazine archive dating back to 1899

    Ad-free website experience

    The Download: newsletter delivery each weekday to your inbox

    The MIT Technology Review App

  • All Access Digital {! insider.prices.digital !}*

    {! insider.display.menuOptionsLabel !}

    The digital magazine, plus unlimited site access, our online archive, and The Download delivered to your email in-box each weekday.

    See details+

    12-month subscription

    Unlimited access to all our daily online news and feature stories

    Digital magazine (6 bi-monthly issues)

    Access to entire PDF magazine archive dating back to 1899

    The Download: newsletter delivery each weekday to your inbox

  • Print Subscription {! insider.prices.print_only !}*

    {! insider.display.menuOptionsLabel !}

    Six print issues per year plus The Download delivered to your email in-box each weekday.

    See details+

    12-month subscription

    Print magazine (6 bi-monthly issues)

    The Download: newsletter delivery each weekday to your inbox

/3
You've read of three free articles this month. for unlimited online access. You've read of three free articles this month. for unlimited online access. This is your last free article this month. for unlimited online access. You've read all your free articles this month. for unlimited online access. You've read of three free articles this month. for more, or for unlimited online access. for two more free articles, or for unlimited online access.