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Within just two years it will be cheaper to buy an electric car than a petrol or diesel model according to new predictions from Bloomberg’s research arm, which suggests Covid-19 will not torpedo the switch to greener driving.
In Europe large electric cars will be cheaper than their fossil fuel counterparts by 2022, BloombergNEF (BNEF) predicted on Tuesday, with the same “tipping point” for smaller cars following a few years later.
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Sales of petrol and diesel cars peaked in 2017 and are already in “permanent decline” the researchers said.
As electric vehicle (EV) driving ranges increase and price tags fall the demise of fossil fuel cars is set to accelerate, they added.
‘Bumpy’ road ahead
However, the economic fallout from Covid-19 does spell a “bumpy” few years for the global car market, with sales of new cars expected to drop 23 per cent in 2020 as a result of the pandemic.
Electric vehicle sales will hold up better than other vehicle types, but will not escape unscathed, BNEF predicted. Global EV sales are set to fall by 18 per cent in 2020 under the forecast, their first ever fall.
“The Covid-19 pandemic is set to cause a major downturn in global auto sales in 2020,” said Colin McKerracher, head of advanced transport for BNEF. “The long-term trajectory has not changed, but the market will be bumpy for the next three years.”
EV adoption rates to grow
Covid-19 could threaten carmakers’ ability to finance the restructuring of their business for an electric future (Photo: KAZUHIRO NOGI/AFP via Getty Images)
But some markets will continue to see EV adoption rates grow despite the market malaise, driven by supportive government policies, and concern over air pollution and climate change. In Europe, EVs will make up five per cent of new car sales in 2021, compared with 3.6 per cent in 2019, BNEF predicted.Read MoreSwitching to an electric vehicle will ‘cut emissions’ as EVs are better for the environment than petrol cars
And long-term, electric vehicles are still set to take over the motoring market. By 2040, 31 per cent of passenger cars in the world will be electric, two-thirds of busses, and almost half of all scooters, motorcycles and mopeds. However, to charge all these electric vehicles, the world will need to install 290 million charging points by 2040, including 12 million public chargers, BNEF pointed out.