Growth in electric vehicles sales central to closing emissions gap

Electric vehicles (EVs) will need to increase their combined market share to 16% by 2020 to achieve the aggressive fuel economy standards set by regulators, according to new research by the World Energy Council.

While EVs currently represent less than 1% combined market share across the world’s largest markets for new passenger cars, they should be considered central to any policy and technology portfolio designed to lower transport emissions.

“Over the past decade, we have seen the emergence of climate change and fuel price volatility as headline issues that keeps energy leaders awake at night. As a result, many countries have set ambitious fuel efficiency targets for passenger vehicles,” said Christoph Frei, Secretary-General of the World Energy Council.

“The innovative role EVs can play in meeting these standards makes for a pragmatic step in closing the emissions gap by 2020. Looking beyond 2020, EVs and innovation in this area present a major growth opportunity not only for car manufacturers but for the energy sector as a whole.”

Over the next five to ten years, passenger vehicle manufacturers will be confronted with regulatory pressure and material penalties, as gains in fuel economy fall behind the required rates of improvement set to address environmental preservation and climate change mitigation.

With a collective annual demand of over 40 million passenger vehicles, three of the largest car markets in the world, the EU, US and China, have all set fuel economy improvement targets of approximately 30% for cars from 2014-2020 (as measured in NEDC gCO2/km), which are expected to exceed forecasted new internal combustion engine (ICE) powered car capabilities.

The World Energy Perspective 2016: ‘E-mobility: closing the emissions gap’, published by the Council in collaboration with Accenture Strategy, examines the growth in sales of EVs as the latest technologies to increase average fuel efficiency and meet these stringent economy standards, set in all three markets, referred to as the “EV gap”. In the EU, the EV gap is 1.4 million, 10% of the estimated 2020 projected passenger sales, in the US, 0.9 million (11%) and in China roughly 5.3 million, 22% of the projected passenger car sales.