Electric vehicles will dominate global sales of passenger cars and buses by 2040—just 21 years from now—according to the research firm BloombergNEF.

BNEF's annual Electric Vehicle Outlook report, released earlier this year, says continued sharp reductions in battery costs will make electric cars cheaper than internal combustion alternatives by the mid- to late 2020s in most markets. Since 2010, the average cost of lithium-ion batteries per kilowatt-hour has fallen by 85%.

"Our conclusions are stark for fossil fuel use in road transport," said Colin McKerracher, BNEF's head of advanced transport, in a news release. "Electrification will still take time because the global fleet changes over slowly, but once it gets rolling in the 2020s, it starts to spread to many other areas of road transport.

"We see a real possibility that global sales of conventional passenger cars have already passed their peak."

Here are some of the report's other predictions:

  • Annual passenger electric vehicle sales, which totaled a little more than 2 million in 2018, will increase to 10 million in 2025, 28 million in 2030, and 56 million in 2040.
  • By 2040, 57% of all passenger vehicles sold and more than 30% of the global passenger vehicle fleet will be electric.
  • By 2040 in the US, Europe, and China, electrics will make up 56% of light commercial vehicle sales and 31% of medium commercial vehicle sales.
  • Electric vehicles will constitute 19% of heavy truck sales in 2040. Limited range will slow their adoption. Vehicles powered by natural gas and hydrogen fuel cells will take some market share from diesel and gasoline heavy trucks.
  • Today, shared mobility services (including taxis and ridesharing services such as Uber and Lyft) account for less than 5% of total passenger vehicle miles traveled annually. By 2040, it will be 19%.
  • Electric vehicles will grow from the current 1.8% of the shared mobility fleet to 80% in 2040.
  • Autonomous (self-driving) vehicles will not have a meaningful impact on global transportation until the 2030s.
  • By 2040, 508 million electric passenger vehicles and 42 million electric commercial vehicles will be on the road globally.