EVs could make up 45 per cent of car market globally by 2040, Fitch says

Electric vehicles’ (EVs) market share could rise to 45 per cent globally by 2040, according to Fitch Ratings.

“The [EVs] market has already outpaced expectations,” the ratings agency said in a research report published last week. “The pace of retirement of existing [internal combustion engine cars] will play a crucial role in the evolution of market shares.”

An expected annual retirement rate of 7 per cent of conventional cars will boost EVs, Fitch said. Last year, EV sales jumped 30 per cent to 3.1 million units, or 4 per cent of the global total.

The report comes as various countries around the world, including China, take drastic actions to meet their carbon emissions goals. China, which has pledged to achieve carbon neutrality by 2060, has been playing a leading role in growing the EV market, Fitch said.

According to the report, China as well as the European Union (EU) were racing ahead of other markets by introducing strong incentives aimed at reaching low carbon emissions goals. In China, for instances, Beijing as well as local governments had granted cash subsidies to consumers. Last year, 1.17 million EVs were delivered in the country, an increase of 12 per cent year on year.

The EU was catching up, after reporting 122 per cent sales growth last year, Fitch said. Countries in northern Europe have rolled out strong regulatory and policy incentives to spur EV growth as a way of cutting pollution.