Aug 10, 2021 - Economy

Electric vehicles forecast to overtake gas engines within a decade

Market share projections of <span style="color: #a79a65;">internal combustion engine</span> vs. <span style="color: #009144;">electrified vehicles</span>
Data: IHS Markit; Chart: Will Chase/Axios

Cars over the next decade are going to flip from being mostly gasoline-powered to mostly electrified, according to a new IHS Markit forecast.

Why it matters: The changeover, if it plays out as expected, represents a breathtaking and potentially risky transition for the global auto industry.

  • While automakers have committed more than $300 billion to electrify their fleets — and governments are adding new restrictions on gasoline vehicles —consumer acceptance remains the wild card.

Driving the news: The Environmental Protection Agency last week proposed more aggressive vehicle emissions targets through 2026, while the White House said it wanted half of all new cars and trucks sold to be electric by 2030.

  • With new electric models and the help of emissions credits for some companies, the industry is on track to meet the EPA's revised targets through 2026, IHS researchers said. "Beyond that, there remains work to do."

Where it stands: Electric vehicles accounted for 2.2% of U.S. light-vehicle registrations through May, according to IHS Markit data.

  • Hybrid gas-electric vehicles were 5.8% and plug-in hybrids were just under 1%.

What to watch: IHS Markit forecasts electric vehicles to grow from 3% of sales in 2021 to 32.3% by 2030, while gasoline-powered vehicles shrink from 87% of sales to just 36.5%.

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