You think they haven’t been taking notes while watching our stupid, expensive, murderous, and destructive wars for oil?
I noticed is that the BNEF forecast has typically become more optimistic over time. So in your 2019 forecast, you were expecting 130 million electric cars to be on the road by 2030. Your 2025 forecast expects 230 million. If we take the long view, why has the optimism grown?
Colin McKerracher 3:15
There’s a few reasons for that, and I think it is really important to say you need to do retrospectives on forecasts, otherwise they’re kind of useless. You need to see what you got right and wrong, and also you should tell people what you got right and wrong. That’s why we publish that section every year, it’s to say, ‘here’s what we were right about, here’s what we were wrong about.’
And so I think just general credibility, you should do that. And also, I will say I have seen a lot of very optimistic forecasts that weren’t reviewed and weren’t revisited and are now all sort of comically wrong.
So you go back six, seven years, there’s all these people saying 100% of car sales are gonna be electric by 2025 or 2030, including by Elon Musk, by the way. He said, ‘we think we can get to 50% of sales by 2026.’ It’s 2025 now, and we’re not there, and we’re not gonna be close.
So in terms of why ours have changed: I’ll say from 2019 till now, the size of the fleet forecast has gone up a fair bit. But actually in the last three years, it’s been level and even slightly down. So 2025 was the very first year where our global forecast went down, and that’s because we were anticipating, and starting to see now, a very strong drop in the US.
It’s not dropping yet, but the policy levers going away under the Trump administration will absolutely have an impact. And this is an important thing to mention, is that policy still really matters. You still get the policies that you vote for, and those policies have an impact on the market.
But zooming out and sort of taking the long view, I think the biggest reason why it’s gone up over a five or six year time horizon is that we reached the point of organic consumer demand takeoff in China about three years sooner than we thought we would.
So our general view before was that China and most of the markets are policy push markets for the next few years, and then around 2025 it takes off. What happened in China is that around 2021-2022, organic consumer demand vastly outstripped what the government targets were. Over 50% of sales have a plug, the largest auto market in the world, half of the sales are electric, and that is way ahead of what the government targets were.
What that means is that that kink in the curve where you get organic consumer adoption has come about three years sooner than we thought, and so since then, we’ve adjusted that. In the last few years, it’s been pretty accurate when we’ve been forecasting for the Chinese market, but that’s probably the single biggest lever why the 2025 version is higher in 2030 than the 2019 version was.