A new report on Circulate from Bloomberg New Energy Finance predicted that electric cars will be cheaper to own than conventional cars by 2020, and that they will make up about 40% of all vehicle sales by 2040. 

5724058377_535f4230ef_zCurrently just 1% of all new cars sold are electric and cost is still  a significant barrier.  However, this latest analysis predicts that the total cost of ownership, which takes into account both purchase price and running cost – of electric vehicles will dip below internal combustion engine vehicles, even if fuel efficiency improves by 3.5% every year.

At the core of the report is an analysis of lithium-ion battery costs which have dropped 65% since 2010 and the report predicts that a similar drop will be seen between 2016 and 2030, with prices falling from $350 per kWh to $120.

However, as our President recently pointed out, the electricity fuelling such cars still comes mainly from coal and gas – a habit that shows no sign of going away any time soon.