## Chart of the Week: Electric Takeover in Transportation

_IMF Blog, July 31, 2017_

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**Canonical URL:** [Chart of the Week: Electric Takeover in Transportation](https://www.imf.org/en/blogs/articles/2017/07/31/chart-of-the-week-electric-takeover-in-transportation)

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## Bibliographic details
- Authors: The Editors
- Published: July 31, 2017

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### Overview
- The switch from horses to automobiles in the 20th century paved the way for the rise of oil-based transportation and energy use. Today, electric vehicle ownership is picking up speed.
- Greater affordability of electric vehicles will likely steer us away from our current sources of energy for transportation, and toward more environmentally friendly technology.
- The transition away from motor vehicles could happen in the next 10 to 25 years, based on parallels with the 20th century horse-car transition.

### Adoption patterns and projections
- Patterns observed in the early days of the horse-car transition closely resemble present-day electric vehicle adoption rates.
- Between 2011 and 2015, the average annual growth rate of electric vehicle ownership was 120 percent.
- Using the horse-car parallel, the working paper forecasts:
  - By 2040 motor vehicles could mostly disappear in advanced economies.
  - By 2040 motor vehicles could comprise about a third of the fleet of all cars in emerging market and developing economies.

### Industry dynamics and implications
- Tesla is spearheading the transition to electric vehicles, while the broader auto industry is rapidly increasing the number of electric models offered, including SUVs.
- Volvo announced that it will produce only electric or plug-in hybrids as early as 2019.
- Electric cars take fewer parts to produce and require less maintenance than motor vehicles, implying lower manufacturing and after-sales complexity.
- Policy and labor implications:
  - Investment in people is critical—whether job training or reskilling programs—to enable workers in both advanced and emerging market economies to work with new technologies, such as self-driving cars and in industries such as battery production.

### Geographic and policy signals
- National policy moves and market size:
  - The UK and France are aiming to phase out diesel and gas vehicles by 2040.
  - China has become the largest market for electric vehicles.
  - India recently announced ambitious plans to get millions of electric vehicles on the road by 2030.
- Every month seems to bring news confirming a global shift in transportation technology.

### Environmental and market implications
- Environmental benefits:
  - Reduced emissions over time could help achieve the climate change goals of the Paris accord.
- Oil market implications:
  - The switch to electric cars has deep implications for the oil market; a forthcoming blog will address these implications.

### Key statistics
- Transition timing estimate: next 10 to 25 years.
- Electric vehicle ownership average annual growth rate (2011–2015): 120 percent.
- Projection year cited: 2040 (advanced economies: motor vehicles could mostly disappear; emerging market and developing economies: motor vehicles could comprise about a third of the fleet).
- Volvo production policy change target: as early as 2019.
- India policy target: millions of electric vehicles on the road by 2030.

*Source: Chart of the Week: Electric Takeover in Transportation (The Editors), July 31, 2017*

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## References

- [https://www.imf.org/wp-content/uploads/2017/07/BLOG-1024x600-COTW-Electric-CarsAn-electric-car-recharges-at-a-meter-in-London-Sasha-Fox-Walters-iStock-518703646.jpg](https://www.imf.org/wp-content/uploads/2017/07/BLOG-1024x600-COTW-Electric-CarsAn-electric-car-recharges-at-a-meter-in-London-Sasha-Fox-Walters-iStock-518703646.jpg)
- [IMF working paper](http://www.imf.org/en/Publications/WP/Issues/2017/05/22/Riding-the-Energy-Transition-Oil-Beyond-2040-44932)
- [https://www.imf.org/wp-content/uploads/2017/07/COTW-Electric-Cars.jpg](https://www.imf.org/wp-content/uploads/2017/07/COTW-Electric-Cars.jpg)

_Source: https://www.imf.org/en/blogs/articles/2017/07/31/chart-of-the-week-electric-takeover-in-transportation_