Wood Mackenzie sees trio of economic forces boosting EV sales

A combination of three economic factors may significantly accelerate the adoption of electric vehicles (EVs) in the coming years, energy consultancy Wood Mackenzie said in a report released on Monday.

The report identifies falling battery costs, rising conventional fuel prices and stricter emissions regulations as key drivers that could bolster EV market penetration. Wood Mackenzie analysts noted that battery pack prices have declined by approximately 80% over the past decade, making EVs more cost-competitive with internal combustion engine vehicles.

At the same time, global oil prices have remained elevated amid geopolitical tensions and supply constraints, increasing the cost of gasoline and diesel. This price dynamic improves the total cost of ownership for EVs, particularly in markets with high fuel prices, the consultancy said.

Tighter emissions standards, including those introduced in the European Union and parts of Asia, are also expected to push automakers and consumers toward electrification. Wood Mackenzie projects that global EV sales could reach 40% of total light-duty vehicle sales by 2030, up from roughly 14% in 2023, driven in part by these converging economic forces.

The consultancy emphasized that policy support, such as subsidies and tax incentives, would further amplify the impact of these trends. While challenges remain—including charging infrastructure gaps and raw material supply risks—the alignment of these economic factors could create a favorable environment for EV growth in the medium term.