A new report by McKinsey forecasts a rapid switch from gas guzzlers to electric vehicles on the world’s roads will be boosted by the plummeting costs of owning a battery powered vehicle.
The consulting firm’s 2019 Global Energy Perspective report foresees a two-thirds drop in the cost of EV battery packs by 2030. The tipping point at which EVs will be cheaper to own than internal combustion engine-powered vehicles is forecast to be reached in the early 2020s:
The timing of total cost of ownership (TCO) parity in the US and China is comparable to Europe, with China slightly earlier and the US slightly later, reflecting differences in fuel taxation and subsidies for electric vehicles.
After this tipping point, “economic considerations alone” would be sufficient to accelerate the growth of EV sales, says McKinsey. Car sharing and autonomous driving will add further incentives to go electric. Improving battery technologies will mean that even long-haul trucks could be economically electrified during the second half of the next decade.
Source: McKinsey Global Energy Perspective 2019
McKinsey’s view of the electrification of the transport sector makes for some dramatic reading:
McKinsey’s rosy view of transport electrification stands in contrast to a recent US government study which forecasts electric car sales will be stuck in the slow lane for the foreseeable future.
6 Comments
Undertow of Discourse
McKinsey’s views are usually very close to identical with the views of senior management who hire them. So this article is telling us what the industry thinks.
Martin Winlow
Completely baffled… As far as Europe goes, with its relatively high fuel costs, TCO parity was reached some time ago. And as for “Improving battery technologies will mean that even long-haul trucks could be economically electrified during the second half of the next decade”… it’s like they (or the article author – its not entirely clear who is responsible for this gem) has never heard of Tesla’s electric Semi which, if Tesla is to be believed, will save operators money in spades. Of course it may not hit the streets for another year or two which takes it into the early 20’s…
Morality_Mortality
Gas in North America should be around $10-14 a gallon if subsidies were removed and associated health costs attached. Using fossil fuels isn’t just bad for the environment – it’s killing us softly.
dave hurrie
Europe figured it out years ago.mostly small cars on the road burning much less fuel. In North America we are still spoiled driving the big useless pickup trucks and SUVs. If we paid what Europe does for fuel these big gas guzzlers gone.
Keith Duhaime
The day is coming as slowly happened with tobacco, where owning a fossil fueled vehicle in the neighbourhood is like being the person who wants to light up a cigarette at a social function. No one else will want the smell and/or noise in this case around them.
Pamela
EV sales will only be stuck in the slow lane until battery production can keep up with demand and auto manufacturers other than Tesla start building EVs in other than compliance car numbers. Hopefully that will change in the next 5 years.