Electric vehicles (EVs) have emerged as a paramount solution in the global endeavor to mitigate carbon emissions and transition towards a sustainable, low-carbon future. These innovative transportation systems supplant traditional gasoline or diesel-powered vehicles, consistently reducing emissions, particularly when fueled by renewable electricity sources. The exponential growth of electric cars in recent years has demonstrated their potential to revolutionize the automotive industry and contribute significantly to carbon neutrality. In 2023, a staggering 14 million electric cars were sold, with projections indicating the potential to attain a market share of 27–33 percent (current estimates hover at 17%) by 2050.

The environmental and economic impact of this shift is profound. By transitioning to electric cars at a first cost of US$744.5–782.7 billion less than conventional vehicles, we could potentially avert 7.66–9.76 gigatons of carbon dioxide equivalent greenhouse gas emissions by 2050. Moreover, this transition would result in US$15.1–20.2 trillion in fuel cost savings. It is imperative to emphasize that these calculations encompass emissions generated during electricity generation and the slightly higher emissions associated with the production of electric cars when compared to internal combustion vehicles. Although electric cars tend to be more expensive at the outset, this analysis factors in the expectation of price reductions due to decreasing battery costs.

The electric vehicle solution is predicated on the utilization of vehicles predominantly powered by electric drive trains equipped with chargeable batteries. While primarily adopted in urban settings, it extends its influence to intercity passenger travel. This shift supplants conventional internal combustion engine (ICE) cars with more energy-efficient electric motors and high-capacity batteries that are rechargeable via the electric grid. Notably, the electric grid generally produces fewer greenhouse gas emissions than its conventional counterpart and continues to evolve toward cleaner energy production. In addition to their environmental benefits, EVs also offer the advantages of simpler manufacturing processes, fewer moving parts, reduced maintenance requirements, and independence from fossil fuels.

The electric vehicle market is currently experiencing maturation, largely attributable to early adopters who have driven the remarkable growth witnessed over the past decade. Although EVs presently constitute only a small fraction of the vehicle market, they are poised to witness an exponential surge in the coming decades. This expansion will entail the displacement of a significant portion of conventional vehicles, contributing to the reduction of carbon dioxide emissions originating from road transportation.

For the purpose of our assessment, both battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) are included in specified shares. All relevant variables, such as fuel consumption, are weighted accordingly based on this distribution. We derived total passenger-kilometers of light-duty vehicles from data provided by the IEA 2023 Global EV Outlook. Until 2025, all EV passenger-kilometers are assumed to be within urban areas. Thereafter, the non-urban share increases by 5 percent annually until 2030, maintaining a 70 percent share of urban EV passenger-kilometers from 2030 onwards. This assumption corresponds to the reduction of perceived "range anxiety" associated with EVs as battery technology and charging networks advance. This scenario envisions electric car adoption reaching 28 percent of the total addressable market.

We calculated first costs for purchasing an EV or ICE vehicle using recent data from multiple sources covering key markets, including the US, China, EU, Japan, and worldwide statistics. These costs were weighted according to market sales by region and model. Notably, the purchase costs for EVs are set almost US$15,601.63 higher than ICE vehicles. Operating costs include grid electricity for EVs, adjusted for the ratio of BEVs to PHEVs in our scenario, as well as fuel costs for PHEVs and ICE vehicles. These calculations were informed by multiple sources, including data from the US Energy Information Administration. Global average fuel prices were calculated based on recent IEA estimates, and electricity prices were computed using a decade's worth of data from 51 countries. Additionally, operating costs included maintenance expenses and insurance.

Our envisioned scenario entails 954 million EVs on the roads by 2050. This rapid proliferation of electric vehicles translates to a remarkable reduction of 10.11 gigatons of carbon dioxide equivalent greenhouse gas emissions between 2020 and 2050. Furthermore, it generates US$17.7 trillion in savings in lifetime operational costs for all units installed during that period. The net savings required for implementation amount to $780.1 billion.

It is imperative to underscore that the adoption of electric vehicles carries dual advantages, reducing greenhouse gas emissions and operating costs for households. Nonetheless, addressing the issues associated with consumer education is pivotal in facilitating the mass adoption of EVs. Mitigating concerns regarding the upfront purchase price and operating range is of paramount importance. As battery technology matures and economies of scale are realised, both the initial cost and the range of EVs will become increasingly attractive to consumers. This transition may necessitate financial incentives for consumers and a focus on the mass market rather than solely catering to high-end consumers.

Furthermore, potential challenges arising from increased battery production, including the sourcing of key metals and the management of disposal for old batteries, necessitate careful consideration. These supply chain and environmental issues must be addressed effectively to ensure a truly sustainable transition to electric vehicles.

References.
IEA (2023), Global EV Outlook 2023, IEA, Paris https://www.iea.org/reports/global-ev-outlook-2023, Licence: CC BY 4.0