Electric Vehicles are Forecast to grow to 125 Million by 2030 | Financial Buzz

Electric Vehicles are Forecast to grow to 125 Million by 2030

The International Energy Agency (IEA) says that there will be 125 million electric vehicles on the road by 2030, according to the IEA’s New Policies Scenario. The IEA says the rapid rise in electric vehicles is contributable to increasing regulations regarding environmental concerns.

Although, the IEA forecasts electric vehicles on the road can increase as high as 220 million by the same time period. The upper end of the forecast is provided if the world approaches environmental issues more aggressively by cutting emissions.

The IEA estimated there were about 3.1 million electric vehicles on the road in 2017, increasing 54 percent year over year. China accounted for 1.23 million of those vehicles last year. The amount of electric vehicles has substantial increased in the recent years and is expected to keep growing as international governments begin to implement new laws and regulations.

The IEA acknowledges that governments’ have implemented policies to make electric vehicles more appealing to drivers, helping drive sales for auto manufacturers while being environmentally efficient.

Europe and China are currently the biggest drivers for the markets. The two regions are implementing new regulations to begin transitioning from diesel vehicles to electric vehicles. The U.S. government has already pushed electric vehicle manufacturers to push out vehicles faster to combat harmful environmental effects.

Recent research and development, policy support, infrastructure investment and production improvements are resulting in lower battery costs and higher vehicle sales.

Battery costs, however, are still a major component of EV costs, so financial incentives such as rebates, tax breaks or exemptions will be needed to support electric car deployment, according to Reuters.

The rising number of electric vehicles is also increasing resources required for them such as cobalt and lithium. The demand has caused resource prices to increase heavily in the recent years.

However, electric vehicles are still in the process of development, which is why the boom won’t happen in the next couple years but later on in the 2020s when technology is more advanced and resources are cheaper.