Electric Vehicle Fleet to Hit 700 Million by 2040: BNEF

Sale of combustion vehicles are projected to be 39% lower by 2026 compared to their peak


The number of electric vehicles (EV) is set to exceed 100 million by 2026 and reach 700 million by 2040, according to the latest report by BloombergNEF (BNEF). These estimates represent a significant surge from the 27 million EVs registered at the beginning of this year.

The electrification trend rapidly expands across all road transport sectors, encompassing vehicles ranging from rickshaws to heavy trucks. Notably, emerging economies such as India, Thailand, and Indonesia are witnessing a notable uptick in EV adoption.

EV sales in India reached an unprecedented one million units in 2022, a jump of over 300% against the 322,877 units sold in 2021.

As the momentum for EVs continues to build, many new economic opportunities are emerging. BNEF’s base-case Economic Transition Scenario indicates that the cumulative value of EV sales across all segments is projected to reach a staggering $8.8 trillion by 2030 and a staggering $57 trillion by 2050.

This scenario assumes no new policies are implemented and underscores the central role of EVs and batteries in various countries’ industrial policies. Consequently, competition among nations to attract investment in this burgeoning sector is expected to intensify in the years ahead.

Road transport segment


Under the Economic Transition Scenario, global electricity demand from all types of EVs is forecasted to increase five times from 210 TWh in 2022 to 1,027 TWh in 2030 before a further tripling in demand to 3,251 TWh in 2040.

Over this period, over $1 trillion in cumulative investment in EV charging infrastructure is required globally.

As EV adoption accelerates, the demand for oil in the road transport sector is nearing its peak. The rise of EVs will lead to a peak in overall road fuel demand by 2027. While the United States and Europe have already reached their peak demand, China is anticipated to follow suit by 2024.

Moreover, the report highlights the decline of internal combustion vehicle sales, which peaked in 2017 and steadily decreased. Although the overall vehicle sales rebounded after the pandemic and supply chain challenges, sales of combustion vehicles are projected to be 39% lower by 2026 compared to their peak.

Raw Material Supply

The report also calls for at least a $188 billion investment in battery cell and component plants by the decade’s end to support the growing EV market.

While the forecast for EV adoption looks promising, the report emphasizes the pressing need to address the sufficiency of lithium supply, given its importance in battery production.

Demand for lithium is expected to increase by 22 by 2050 in the Net Zero Scenario. However, the aggressive uptake of sodium-ion batteries could potentially reduce lithium demand by almost 40% by 2035, compared to BNEF’s base-case scenario.

Furthermore, the report underscores that smaller vehicles are more conducive to achieving climate targets.

While three-wheeled vehicles are well on track for this ambitious target, buses, and two-wheeled vehicles are also close. However, commercial vans, passenger cars, and heavy trucks require additional policy support to stay on track for the net-zero trajectory.

Policymakers should prioritize efforts to bridge this gap.

Streamlining grid investments, grid connections, and permitting processes is crucial to support the extensive charging infrastructure required for the trucking industry’s transition.

Considering the findings, the report offers specific recommendations for governments and industry stakeholders, including:

  • Governments with mid-century net-zero goals should establish a phase-out date for the sale of new internal combustion vehicles, applicable across all segments, no later than 2035. The targets should be supported by legislation and concrete policy measures with interim targets.
  • Stricter fuel economy standards and tailpipe CO2 emissions standards are urgently needed. Furthermore, more stringent standards for vans, trucks, and other commercial vehicles should be implemented in all markets.
  • Governments should establish requirements and standards for the recycling of EV batteries and continue supporting research into next-generation battery technologies. Funding and streamlined permitting processes could incentivize the development of new raw material supplies.
  • Research and development into emerging battery technologies that reduce dependence on critical raw materials must be encouraged. Advancements in battery technologies, such as sodium-ion batteries, solid-state batteries, and next-generation anodes, should be supported by governments.
  • Establishing dense public charging networks is essential to alleviate range anxiety for EV consumers, ultimately reducing pressure on battery raw material supplies. While EV ranges have been increasing by 10% annually since 2018, further investment is needed in lithium, nickel, and cobalt to accommodate the anticipated demand.
  • Investment in clean power generation should be closely aligned with road transport electrification efforts. As solar energy generation expands, maximizing emissions benefits and cost savings can be achieved by shifting more EV charging to midday.

According to a report by the International Energy Agency, over 10 million electric cars will be sold globally in 2022, and the sales are anticipated to increase by 35% this year, reaching 14 million.

In February this year, BNEF forecasted that the total investment in electric vehicle chargers is set to cross $100 billion in 2023, and the next $100 billion of spending is expected to be achieved within the next three years.