E023ElectricVehicleOutlook2023Bloomberg NEFBloomberg NEFThis is an excerpt from BloombergNEF's 2023 Electric Vehicle Outlook.To findout more about the full report,please contact our team.Executive SummaryThe transportation and automotive sectors are undergoing a period of profound730 milliontransformation.Electrification is now spreading rapidly in almost all segments of roadNumber of passenger EVs ontransport,from passenger cars to commercial vehicles,buses and two-and three-the road in 2040 in thewheelers.Each country has its own unique mix of vehicles and while progress variesEconomic Transition Scenarioacross them,the overall direction of travel is increasingly clear.Technology changes are at the core of this transition as battery prices have fallen2029dramatically over the last decade.Battery prices rose for the first time in 2022 butYear road transport emissionsinnovation in the area is not slowing down,with advances in areas like solid-statepeakbatteries,next-generation cathode and anode chemistries,and sodium-ion technologyall reaching commercialization in the next few years.$1.9 trillionYet technology changes alone are not enough to keep the road transport sector on trackCharging infrastructurefor net-zero emissions by mid-century.Policymakers have an important role to play inmarket opportunity betweendriving the automotive market toward zero-emissions options,improving fuel efficiency,today and 2050 in thegetting the power system ready for electric vehicles,and in reducing overall carEconomic Transition Scenariodependency.Eliminating emissions from road transport will require all hands on deck,including automakers,battery manufacturers,charging companies,grid operators,miners,large fleet operators and consumers.As momentum grows,new economic opportunities are taking shape.Batteries andelectric vehicles have taken center stage in new discussions on industrial policy,withcountries now competing to attract investment and build new clusters of high-valuemanufacturing.Meanwhile,regulators and grid operators are looking at ways to ensureEVs benefit the power system.Electrification is not the only vector of change.Shared mobility,vehicle connectivity and,eventually,autonomous vehicles are also set to reshape automotive and freight marketsaround the world.Urbanization also continues its steady march,leading to increasedconcems around vehicle congestion and urban air quality.This report draws on BloombergNEF's team of sectoral and regional experts around theworld.It updates our outlook for how road transport could evolve over the next 30 years.It includes analysis on EV adoption in passenger vehicles,commercial vans and trucks,two-and three-wheeled vehicles and buses globally.It also looks at other drivetrains,including hybrids,natural gas and fuel cells,and then explores the resulting impacts ofall of these on electricity markets,oil demand,battery materials,charging infrastructureand CO2 emissions.The key findings are as follows:Direct electrification via batteries is the most efficient,cost-effective and commerciallyavailable route to fully decarbonizing road transport.Fuel cell vehicles play a role insome hard-to-electrify long-haul trucking applications but play no meaningful role in theNo portion of this document may be reproduced,scanned into an electronic system,distributed,publidydisplayed or used as the basis of derivative works without the prior written consent of Bloomberg FinanceBloomberg Finance L.P.2023Disdaimer nofice on page 22 applies throughout.