According to a recent Bloomberg article, electric vehicles are taking off even faster than expected and “are eating into the transportation system and taking bigger bites every year.” Soon, it predicted, the number of gas cars globally will start to shrink and could largely affect transportation, fuel costs and energy systems.
Bloomberg New Energy Finance (BNEF) predicts that there will be more than 27 million electric passenger vehicles on the road by the end of 2022. There are currently fewer than 2 million electric buses and commercial vehicles being used on the roads and nearly 300 million electric two- and three-wheelers.
Some automakers, such as General Motors, are already making statements claiming that they will stop selling new gasoline-powered cars and trucks and will pivot to battery-powered vehicles. General Motors said its plan is to be fully executed by 2035.
This year, however, BNEF expects internal combustion engine (ICE) car sales to peak at roughly 1.2 billion and only drop slightly in 2023. From there, it is predicted the decline in ICE cars will begin.
In the next 10 years, BNEF believes that ICE car sales will decrease to less than half what they are today, which could lead to challenges regarding infrastructure in relation to charging networks for EVs.
“One of the bigger questions is around whether or not the U.S. power grid is able and ready to handle this surge of electric vehicles. If every American switched over to electric passenger vehicles, the U.S. would see a 25% increase in electricity,” said Kiana Van Waes, corporate sustainability analyst at Convoy. “As we’ve seen in Texas, this can cause a complete collapse of the entire U.S. energy system. There’s a lot of work that needs to be done in this area and it’s very costly and time consuming.”
It is anticipated that at least $1.4 trillion worth of investment in EV charging networks for 500 million chargers is needed by 2040.
“We are currently introducing EV in the places that we can actually do it right now, like local delivery. In these cases, the delivery radius is not that far, so the driver can deliver and come back to charge the vehicle,” said Danny Gomez, managing director of financial and emerging markets at FreightWaves. “Long haul is still a problem. EV charging will need to be more ubiquitous overall. There are signals that the government is interested in making those investments.”