Report: Sales of internal combustion vehicles are now in “permanent decline”

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By Peter Valdes-Dapena, CNN Business

Sales of non-plug-in internal combustion vehicles peaked in 2017, according to a report by industry analysts Bloomberg New Energy Finance, and have been in “permanent decline” since then. that plug-in sales hybrid and electric vehicles are increasing.

Plug-in vehicle sales are also expected to triple their current levels by 2025, according to the report.

“Most importantly, the market is shifting from a market driven primarily by politics to one where organic consumer demand is the most important driver,” wrote lead authors Colin McKerracher and Aleksandra O’Donovan. in the BloombergNEF report.

In 2025, the global auto industry will sell 20.6 million plug-in vehicles, according to the report, up from 6.6 million this year. Sales of purely internal combustion vehicles, although still expected to account for the majority of total car sales in 2025, will have declined.

Fully battery-powered vehicles will account for 75% of plug-in vehicle sales by 2025, according to the report. Plug-in hybrid vehicles are not expected to represent a significant percentage of plug-in vehicle sales outside of Europe. Plug-in hybrid sales will peak around 2026, the report predicts. Fuel cell vehicles, which run on electricity generated from hydrogen gas rather than stored in batteries, are not expected to play a significant role in the passenger vehicle market.

Some car manufacturers, like General Motors, have already announced plans to sell only zero-emissions vehicles by 2035, but currently derive the vast majority of their revenue from gasoline-powered trucks and SUVs. Other car manufacturers, like BMW and Toyotahave been more cautious about setting firm deadlines for phasing out internal combustion.

Market penetration of electric vehicles will not be the same everywhere. Electric vehicles are expected to reach 39% market share in China and Europe by 2025, according to the report. They could, however, represent an even larger share of sales in some European countries, with electric vehicles accounting for 40-50% of passenger vehicle sales in the UK, Germany and France.

China and Europe will account for 80% of all electric vehicle sales worldwide in 2025, the report predicts, with the United States accounting for just 15% of global electric vehicle sales. However, sales in the United States will begin to rise sharply over the next decade as major automakers and startups begin producing electric versions of the types of vehicles Americans like to buy.

China’s BYD is the world’s second-largest electric vehicle brand, selling nearly 600,000 electric and plug-in hybrid vehicles in 2021.

“Whether an electric Ford F-150 or one Chevy Silverado or one Rivian Pickup truck, all of a sudden what you’re going to see in the next few years is a better match between what American consumers want in terms of the size and shape of the vehicles they’re buying and the available supply” , McKerracher said in an interview with CNN Business.

The United States also has a lot of catching up to do in terms of public charging infrastructure, he said. However, the US federal government has announced its intention to invest massively in charging infrastructure. And because a greater percentage of Americans live in single-family homes and can therefore charge at home economically and conveniently, less public charging will be needed here. than in countries with higher housing density, such as China, he said.

One of the biggest surprises from their research, McKerracher said, was a particularly rapid increase in the market share of electric vehicles in China, which went beyond what government requirements had dictated.

“We’ve long hypothesized that there’s a point where politics stops being the main driver and really organic demand, consumer demand, takes over,” he said. “And it looks like that’s what’s happening in China.”

Even still, road transport is not on track to be carbon neutral by 2050, and even if all vehicles on the road were zero emissions, it wouldn’t be enough to solve the climate crisis, warn the authors.

“Simply changing the transmission of vehicles may not be the most efficient way to achieve net zero, and a full range of solutions – including more public transport and active transport options – will be needed,” they wrote.

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Kevin A. Perras