The largest automotive markets will go electric by 2035Home, Transportation Industry News
10/10/2021 Leave a comment
Mainstream EVs will transform the automotive industry and help decarbonize the planet.
Regulatory pressure and the consumer pull toward EVs vary greatly by region. Europe is mainly a regulation-driven market with high subsidies, while in China consumer pull is very strong despite reduced incentives. In the United States, EV sales have grown slowly due to both limited regulatory pressure and consumer interest, although the regulator trend is set to change under the new administration.
On a global level, we expect EV (BEV, PHEV, and FCEV) 1 adoption to reach 45 percent under currently expected regulatory targets. However, even this transformative EV growth outlook is far below what’s required to achieve net zero emissions. EVs would need to account for 75 percent of passenger car sales globally by 2030, which significantly outpaces the current course and speed of the industry.
That hum in the distance is the sound of the concept of mobility changing—for the better. While challenges to the electrification of the vehicle parc persist, opportunities worth fighting for also lay ahead. This is particularly evident in cities, where emissions, congestion, and safety constitute major issues today. If the status quo continues, mobility problems will intensify as population and GDP growth drive increased car ownership and vehicle miles traveled. In response, the mobility industry is unleashing a dazzling array of innovations designed for urban roads, such as mobility-as-a-service, advanced traffic management and parking systems, freight-sharing solutions, and new transportation concepts on two or three wheels.
The current opportunity to transform the way we move fundamentally results from changes in three main areas: regulation, consumer behavior, and technology.
Regulation. Governments and cities have introduced regulations and incentives to accelerate the shift to sustainable mobility. Regulators worldwide are defining more stringent emissions targets. The European Union presented its “Fit for 55” program, which seeks to align climate, energy, land use, transport, and taxation policies to reduce net greenhouse gas emissions by at least 55% by 2030, and the Biden administration introduced a 50 percent electric vehicle (EV) target for 2030. Beyond such mandates, most governments are also offering EV subsidies.
Cities are working to reduce private vehicle use and congestion by offering greater support for alternative mobility modes like bicycles. Paris announced it will invest more than $300 million to update its bicycle network and convert 50 kilometers of car lanes into bicycle lanes. Many urban areas are also implementing access regulations for cars. In fact, over 150 cities in Europe have already created access regulations for low emissions and pollution emergencies.
source McKinsey InsightsEV