Almost one in every six new cars sold around the world in 2025 will be electric vehicles, according to a new report by experts from UBS who have lifted their EV sales forecasts sharply.
In Europe the electric vehicle share of new sales will be even greater, with UBS predicting one in every three cars sold in Europe will be electric in 2025.
???'Electric vehicle sales have accelerated strongly in the second half of 2017 both in China, where changes to subsidies in 2018 are driving strong sales now; and in the rest of the world,'' the report said.
After undertaking a survey of about 10,000 consumers in the world's six biggest car markets, UBS said consumer interest in electric vehicles was rising, while ???'the popularity of diesel cars has dropped sharply''. It also noted rising interest in EVs among fleet buyers.
UBS now forecasts 16.5 million electric vehicle sales in 2025 worldwide, compared to its previous forecast of 14.2 million sales made earlier this year. The estimates refer to plug-in hybrid and full battery-electric vehicles.
???'Our higher EV sales forecast is supported by a wave of investments in new charging infrastructure - the lack of sufficient charging coverage is still a key reason for consumers not to buy an EV.
???'The high purchase price (number 1 reason for not buying an EV) should also become less relevant as EV powertrain costs come down faster than expected. One in four consumers interested in buying an EV is ready to pay a premium,'' UBS said.
The investment bank also examined the impact of the rise of electric vehicles on the demand for raw materials used in the manufacture of electric vehicle batteries.
With commodities such as lithium, nickel and graphite used in the manufacture of electric vehicle batteries, Australian resource companies in these segments are well placed to benefit from the rise in electric vehicles.
???'It's going to be a good new opportunity for the Australian resources sector,'' report author Lachlan Shaw told Fairfax Media.
???'We are going to see very very strong demand growth for battery commodities. The dominant commodities today going into automotive batteries are lithium, nickel, cobalt, graphite, some other ones as well. But then obviously, and this commodity is in both the battery but also in the powertrain - copper,'' he said.
???'So what does it mean for Australia? Australia is the world's largest producer of lithium from hard rock mines, and there are several projects at an advanced stage to expand production and export earnings there significantly in the next five years.
???'We are also starting to see the development of a lithium chemicals processing industry, particularly in Western Australia, and that is a value-add development. There is potential there for an export business over the next five years or longer, to grow from nothing today to be a real, quite material export earner,'' he said.
UBS said demand for lithium is forecast to lift almost five-fold by 2025.
???'Higher battery demand drives stronger battery commodity demand, tightening markets and supporting prices. It's not all one-way upgrade traffic, though - we have for instance included a more aggressive decline in lithium intensity as the shift to more nickel-rich NMC cathodes reduces the weight of materials per KWh of capacity. Still; lithium demand is expected to lift almost five-fold by 2025,'' the report said.
While global electric vehicle sales are rising strongly, they have a long way to go to reach 16.5 million per year. In 2017, electric vehicle sales are expected to pass the one million mark for the first time. Last year EV sales were about 780,000 worldwide.
In Australia, for the year till the end of November, 1032 pure electric vehicles have been sold, up from 705 for the same period last year. Sales of hybrid vehicles for the year till the end of November totalled 10,494, down from 11,173 for the same period last year.
The Australian figures do not include the sales of Tesla vehicles.