In this study, the authors test the sensitivity of the projected sales of electric vehicles (EVs) to different battery costs and climate policy futures. The model suggests that the effectiveness of policy incentives will strongly depend on the battery floor costs, as EVs only gain significant shares (15% or more) of global car sales within our model framework when battery costs reach 100 $/kWh or less.
Although the rapid fall in the costs of batteries has made EVs more affordable and boosted their sales, EVs still account for only a fraction of total car sales. In the last years, the battery costs of electric vehicles have dropped faster than previously estimated in the empirical literature.
As a result, future cost projections have been adjusted. The larger than expected reduction in costs also shows the uncertainty of battery cost development, which will affect the success of a transition to low-carbon transport. Integrated assessment models show that reducing greenhouse gas emissions is more challenging in the transport sector than in other sectors. Switching to EVs could significantly reduce passenger road-transport emissions.