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Pandemic drives a new type of buyer, and Europe will lead the way to all-electric, EY forecast says

Electric vehicles (EVs) will make up more than half of auto sales world-wide by 2033, according to a new study. By 2045, the researchers say, internal combustion engine vehicles will total less than 1% of new car sales globally.

The predictions come from consulting firm Ernst & Young. EY's Mobility Lens Forecaster study used a neural network to examine "consumer behavior, regulatory trends, technology evolution (vehicle and ecosystem) and manufacturers' announced strategies" in making its predictions.

Europe will go first, EY says. "The latest predictions show that by 2028 EV sales in Europe will surpass those of other powertrains, a trend that will be repeated in China by 2033 and in the U.S. by 2036."

COVID-19 bringing in a new type of buyer

The COVID-19 pandemic contributes significantly to the AI's predictions. "Many people who had rejected ownership in lieu of ride-sharing and public transport have reassessed in the shadow of the COVID-19 pandemic," EY explains.

An earlier study published last November showed that "almost one-third of non-car owners planned to buy a car in the next six months (19% plan to buy new, 12 % used cars), and about half of those are millennials."

"Among both current car owners and non-car owners, 30% said they'd prefer a non-ICE (internal combustion engine) vehicle for their next purchase," EY says.

Regulations pushing EVs

Worldwide changes in government regulations are also contributing. "The U.K. has announced that it will ban the sale of ICE vehicles starting from 2030," EY notes, while "China also continues support for EVs through regulatory measures."

France, Germany, Spain, and Austria included EV incentives in their COVID-19 relief efforts, lowering the cost of EVs for many buyers.

"The new U.S. administration's announcements include continuity of EV buying incentives and the development of charging infrastructure," EY adds. Though we would caution that the administration's plans may not pass through Congress.

EVs are improving

Meanwhile, EVs may win over some buyers simply because they are rapidly becoming competitive vehicles. "Many more models that are much more appealing are coming out," said Randy Miller, EY's global advanced manufacturing and mobility leader. "You factor that with the incentives, and those are the raw ingredients that are driving this more optimistic view."