Summary
Battery costs have been declining at a rapid pace since 2009, at ~20% actually.
We should reach an inflection point for a viable economic proposition for consumers between 2025 and 2030 without incentives.
Until that time, regulation, rather than consumer demand, will still drive the electrification of cars.
Until 2020, advanced internal combustion engines (ICEs) will be sufficient to meet regulations. After that, electrification will be required.
In 2025, most cars will still have an ICE. The average cost per car sold to meet regulatory requirements will be ~$500 per unit above ICE costs.
Electrification will manifest in different ways around the world. In the US, it will be driven by mild hybrids or 48-volt hybrids (MHEVs) and battery-operated electric vehicles (BEVs); in the EU and China, by BEVs; and in Japan and the rest of the world, by mainly full hybrids (HEVs) and MHEVs.
The shared economy (taxis and car sharing) will spur HEV and BEV adoption before individual customers, given higher mileage. Autonomous vehicles will boost shared mobility and therefore demand for HEVs and BEVs.
Globally, it is expected that the share of electrified vehicles (xEVs) to be ~30% by 2025 and ~50% by 2030. The share of BEVs is projected to be 6% in 2025 and 14% in 2030.
