Sales of electric vehicles are accelerating rapidly, which could lead to an epochal change in the auto industry over the next decade, according to a new report from the Environmental Defense Fund.
The Electric Vehicle Market Update, the fifth in a series of reports on the growth of electric vehicles, notes that the electric vehicle sector has grown in particular momentum over the past year, despite the problems of supply chain that have affected the entire automotive industry, as well as material issues. According to the report, sales of electric vehicles globally and in the United States increased by 40% and 4% respectively year-over-year.
Production Mercedes-Benz EQS 2022 at the plant in Sindelfingen, Germany
This momentum will continue, the report predicts, noting that the National Academies of Sciences, Engineering, and Medicine have declared that “the period from 2025 to 2035 could bring the most fundamental transformation in the more than 100 years of automotive history.
This transformation will be driven by falling battery costs, allowing electric vehicles to reach price parity with internal combustion cars and dominate the market by 2035, according to the report.
Automakers will spend more than $515 billion through 2025 to develop new electric passenger vehicles and battery manufacturing infrastructure, he predicts.
That includes $75 billion that 13 companies plan to spend in the United States on battery factories in six states, according to the report. This will likely require a quick start to work on the US supply chain; the Biden administration, for example, recently announced that it would use the Defense Production Act to support electric vehicle battery production.
2022 GMC Hummer EV pre-production at Factory Zero in Detroit, Michigan
By 2025, more than 100 electric vehicle models will be available in the United States, covering many different market segments, according to the report.
Last year’s electric vehicle sales figures were indeed impressive. Global sales tripled from 2019 and US sales set records. Tesla also delivered a record number of electric vehicles in the first quarter of 2022 despite ongoing supply chain issues.
But not all analysts are so optimistic about continued growth in electric vehicle sales. Swiss technology company ABB, which sells equipment used in battery factories, argued that there would not be enough battery factories to support the expected increase in electric vehicles beyond internal combustion. in the 2030s. Other analyzes have pointed out that high commodity prices could delay projected declines in battery costs for the time being.