Battery-powered cars will make up about half of the global automotive market by 2030, as environmental regulations, falling prices and the deployment of driverless taxis fuel demand, according to a new study by the Boston Consulting Group.
"The timing of the market's transition to a new type of powertrain has long been the subject of debate," Xavier Mosquet, BCG senior partner and author of the study, said in a statement. "The prospects for electric vehicles are now clarifying."
Vehicles powered solely by an internal-combustion engine -- the dominant propulsion system since the advent of the Model T over a century ago -- will cede about half the global market to battery-powered autos by 2030, BCG said. Traditional engines won't disappear completely, though, since most of the electrified vehicles of the future will be hybrids that run on a combination of battery power and gasoline, the study found.
China will lead the way in the adoption of electrified cars as its smoggy skies, high gas prices and government control enable it to enact regulations to quickly accelerate the shift. The U.S. will be close behind, thanks to low electricity costs and a quicker payoff on battery prices from American drivers' high mileage habits, while Europe will make a slower transition. The rise of robo-taxis, whose high-mileage profile also offers a quicker payback on high-cost electric power, will help speed adoption of battery power globally, BCG said.
As the cost of batteries plummets over the next decade, the economics of owning an electric car will overtake the old gasoline model.
"In 2027, as an average U.S. consumer, I'm better off taking a battery electric vehicle," Mosquet said Thursday at a briefing with reporters in Troy, Michigan. That's because battery-powered cars will have a better payback over five years than vehicles with gasoline engines, the study found.
Automakers are already gearing up for the changeover. Luxury electric carmaker Tesla Inc. is working through production delays to launch its Model 3, an EV for the mainstream that starts at $35,000. General Motors Co. said it is aiming for an all-electric future and that by 2020 it will offer 20 models powered only by batteries. Ford is focusing on developing electrified models while still serving its pickup-hungry customers and has partnered with companies on electric vehicles in China and India.