Nowadays only one percent of cars on the road are electric.

London-based IHS Markit is a company specialized in providing information, analysis and expertise to support the decision-making process of businesses and governments in a variety of domains like defense and security, aerospace, chemical, energy, and automotive. Starting December 15, it will begin a research project called “Reinventing the Wheel” to try and predict whether the car industry is heading towards a revolution similar in magnitude to the one driven by the development of the combustion engine in the 20th century.

The company is now presenting some of the findings that will be included in the research project, with part of the focus being on electric vehicles. Even though only one percent of the cars on the road today are EVs, IHS Markit mentions it’s still a 1,000-percent increase compared to 2010 and it estimates the trend will continue in the years to come. As a matter of fact, it predicts EVs will represent 15 to 35 percent of total vehicle sales by the year 2040.

Jaguar I-Pace Concept
Jaguar I-Pace Concept

One of the most important factors that will have a significant impact on the adoption of EVs is going to be the progress made with battery technology. That being said, IHS Markit mentions also crucial will be the regulations and support coming from governments to promote zero-emissions cars. Another prediction the company is making is that EVs could account for more than 50 percent of new passenger car sales in 2040.

All the major players in the car industry are investing significant sums of money in the development of electric cars. Take for example Daimler, which has already announced plans to spend a whopping €10 billion and it has established the EQ sub-brand set to have 10 electric cars by the middle of the next decade.

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Another relevant example would have to be the Volkswagen Group with its “TOGETHER - Strategy 2025” plan referring to the launch of more than 30 EVs by that date. Jaguar is also hopping on the EV bandwagon with a production version of the I-Pace concept, while BMW is preparing an entirely electric X3 and also a Mini that won’t have a combustion engine.

Moreover, Toyota is gearing up to introduce a long-range electric car by 2020, with other models to follow in the next decade. As for Hyundai, it has the 124-mile Ioniq Electric, but it’s already preparing a 200-mile crossover slated to go on sale in 2018.

These are only a few examples to get an idea of the EV era upon us.

Source: IHS Markit

2017 Volkswagen e-Golf

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Electric vehicles could make up 15 to 35 percent of total new vehicle sales globally in 2040, according to IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions. The findings are part of a new research project, Reinventing the Wheel, that will be conducted over the first half of 2017.

“The key question is whether we are approaching a transformative shift akin to the first decade of the 20th century, when the internal combustion engine, cheap gasoline, bicycle technology and mass production combined to usher in the automotive age,” said Dr. Daniel Yergin, vice chairman of IHS Markit and chairman of the study who wrote about the beginning of the automotive age in his most recent book, The Quest. “Converging developments along multiple tracks are leading us to focus on this important question.”

While electric vehicles constitute a small percentage of the world’s vehicle sales and are just 1 percent of the on-road fleet today, sales in 2016 are up more than 1,000 percent since 2010—a trend that IHS Markit expects to continue with the potential to make electric vehicles more than one third of the new vehicle sales in 2040.

“Significant advances in battery technology, financial support from governments, regulations and values of millennials will be key factors leading to increases in electric vehicle adoption,” said Jim Burkhard, study co-director and chief of research at IHS Markit for crude oil markets and energy scenarios.

Electric vehicle share in individual markets will vary based on these factors, IHS Markit says. For instance, in China and Europe—regions where policies are favorable to electric vehicles—IHS Markit estimates that electric vehicles could comprise over half of new passenger vehicle sales in 2040.

The growth of electric vehicles is one of several forces reshaping the future of transportation that are the subject of Reinventing the Wheel, a major new multi-client research initiative combining the industry-leading chemical, automotive and energy expertise of IHS Markit. This initiative will be the subject of a comprehensive new study to be completed in 2017. Other critical factors to be examined by the study include the potential impacts of car sharing, ride hailing and autonomous vehicles on the transportation ecosystem. The study is set to begin December 15 in Detroit.

“How and when this transformation takes shape will have significant impacts on the global economy and raises fundamental questions for the oil and gas, automotive, chemical and the electric power industries, as well as individual consumers,” said Tiffany Groode, study co-director and head of IHS Markit automotive scenarios.

About Reinventing the Wheel

Reinventing the Wheel is a major multi-client research initiative that will provide a first-of-its-kind, system-wide analysis of the new reality of transportation and the potential implications for the oil, gas, automotive, electric power and chemical industries.

Chaired by Daniel Yergin, IHS Markit vice chairman and Pulitzer Prize-winning author, Reinventing the Wheel will combine the industry-leading expertise from the chemical, automotive and energy teams within IHS Markit. The project will utilize IHS Markit’s long track record of scenarios development to envision content-rich scenarios that encapsulate possible futures for cars and energy, combined with comprehensive analytics and datasets based on the modeling expertise of IHS Markit.

Reinventing the Wheel will focus on the world’s largest automotive markets—the United States, Europe and China, as well as India—with projections out to the year 2040. The study, to be completed in 2017, will consist of two parts.

Part I will include the development of scenarios representing potential paths for the future of the car, energy and chemicals. Part II will assess the impact, investment implications and strategic choices for the automotive, oil, gas, electric power and chemical industries.

For more information about Reinventing the Wheel, please contact Kate Hardin (Energy), Kate.Hardin@ihsmarkit.com; Bjoern Huetter (Automotive), Bjoern.Huetter@ihsmarkit.com; or Anthony Palmer (Chemicals), Anthony.Palmer@ihsmarkit.com

For media inquiries, please contact Jeff Marn (Energy), Jeff.Marn@ihsmarkit.com; Michelle Culver (Automotive), Michelle.Culver@ihsmarkit.com; or Melissa Manning (Chemicals), Melissa.Manning@ihsmarkit.com

About IHS Markit (www.ihsmarkit.com)

IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 85 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.

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