As battery prices continue to fall, electric vehicles could hit price parity with fossil-fuel models in Europe in 2024 and the U.S. market in 2026, and account for two thirds of global car sales by 2030, according to new research.
Battery costs currently make up about 40 percent of an EV's price tag but a new report by the Rocky Mountain Institute (RMI) predicts battery costs should halve this decade, making EVs "for the first time as cheap to buy as petrol cars in every market by 2030 as well as cheaper to run." This price parity is seen as a crucial tipping point.
According to RMI's analysis, the rapid growth of electric models in Europe and China "implies that EV sales will increase at least six-fold by 2030, to enjoy a market share of 62% to 86% of sales."
"It's not radical whatsoever to see the continued exponential growth of electric vehicles," RMI's Bond told Reuters. "This is what one should expect."
RMI says EVs will reach a tipping point in price parity with fossil-fuel models as early as 2024 in Europe, 2025 in China, 2026 in the U.S. and 2027 in India "for medium-sized cars, and even sooner for smaller vehicles."
What does all that do to fossil fuel demand? According to the RMI research, oil demand for cars peaked in 2019 and will fall by at least one million barrels per day every year after 2030.