By 2050, nearly 70% of passenger vehicles could be EVs—but net-zero will still be out of reach

Call it what you’d like: an inflection point, a milestone, a crossroads, a defining moment.

Either way, the point is that we’re living through a period of significant change in the auto industry, as electric vehicle demand outstrips supply, sales of internal combustion vehicles potentially peak, and traditional automakers and governments alike commit tens of billions of dollars toward electrifying the car.

• In 2021, EV sales accounted for nearly 10% of all new passenger-vehicle sales worldwide. That figure could more than double to 23% by 2025, according to the latest installment of energy research firm BloombergNEF’s annual EV Outlook report.
• EVs represent a $9 trillion market opportunity between now and 2030, per BNEF.

But, key questions remain. Namely, is the current momentum enough to reach 2050 net-zero goals for transportation?

The short answer, per BNEF’s new report, is no. Not without major adjustments. While some segments of transportation are close to being on track for net-zero goals—i.e., 100% zero-emission vehicle share by 2050—others are further away.

• The good: Without additional policy support, BNEF anticipates two- and three-wheeled vehicles would get to a 74% and 94% zero-emission vehicle share by 2050. It also estimates that municipal buses would get to 84% by then. However, these segments combined account for just 6% of current CO2 emissions from road transport.
• The so-so: Passenger vehicles, which make up 53% of current CO2 road-transport emissions, would hit an estimated 69% zero-emission vehicle share by 2050 without further intervention. Light-duty commercial vehicles, which account for 11% of current transport emissions, are on pace for 75%.
• The bad: Medium- and heavy-duty commercial vehicles (e.g., trucks) will hit just 29% zero-emission vehicle share by 2050 without additional intervention. This segment accounts for nearly one-third (30%) of current CO2 emissions from transport.

Global view: On our current path, BNEF also anticipates that the existing EV adoption gap between “wealthier countries and emerging economies” will widen further, with leading markets projected to surpass 60% market share of EVs by 2040, while EVs will make up less than 20% of all vehicles in emerging markets by then.

• BNEF recommends wealthier countries and “multilateral institutions” make capital available to emerging markets to help them develop EV industries, noting that “much of the gap” between our current trajectory and net-zero goals will be made up by these economies.

Addition by subtraction: While EVs are a necessary tool for reducing transportation emissions, they’re not the only tool. Reducing vehicle dependency by investing in public transportation, walking, and biking can have a significant effect on lowering emissions, per BNEF—and make net-zero goals more attainable.

• “Governments should prioritize investments in these areas, many of which also have concurrent health benefits,” the authors wrote. “An ‘all of the above’ approach is needed to stay on track for net zero.”

Big picture: Although substantial progress has been made on EV adoption in wealthier countries, continuing on the current path would mean the vehicle-transportation sector still emits 3.5 gigatonnes of CO2 per year in 2050, BNEF estimates. For context, the entire transportation sector—including aviation and shipping—emitted 7.2 gigatonnes in 2020, per the IEA.