Electric vehicle sales will likely jump over the next two to three years as prices fall and more options are made available, according to BlackRock’s global head of thematic and sector investing.
Customers will have more opportunities to move away from traditional combustion engines to electric vehicles and their options will not be restricted to only certain auto suppliers, Evy Hambro told CNBC’s “Squawk Box” on Thursday.
“I think we’re at this tipping point of change,” Hambro said. “Over the next two years, we’re going to see this massive extension of breadth of models, we’re going to see price point of entry drop as well. We’re expecting to see a big lift in electric vehicle sales over the next two to three years.”
Earlier in the year, the International Energy Agency predicted that electric vehicle ownership will jump to about 125 million by 2030, spurred by policies that encourage the purchase of clean-running cars. That would mark a big jump from 2017 when the agency estimated there were 3.1 million electric vehicles in use.
That’s because most traditional automakers are now investing to create their own electric vehicles. For example, Volkswagen recently said it will spend about $50 billion on new plants, electric cars, autonomous driving and other mobility services in an attempt to be the most profitable maker of electric cars.
China leading the way in some areas
Different countries are at various stages of adopting electric vehicles, depending on regulatory environments and consumer preferences, according to Hambro. For its part, China is leading the way in many new business models around automation and electric vehicles, including in battery technology, he said.
In a bid to curb air pollution, Beijing has aggressively pushed for new energy vehicles — that run partially or fully on electricity — through preferential policies, providing subsidies and by exercising its manufacturing power. It is also exploring autonomous driving technology.
On Wednesday, American chipmaker Nvidia signed separate deals with Chinese electric vehicle start-ups XPeng Motors, Singulato Motors and SF Motors to develop the self-driving technology, despite the ongoing trade tensions between the U.S. and China.
“We’re seeing China increasingly open up to international business,” Hambro said. “We’re now seeing high levels of ownership, majority ownership in some industries. We’re seeing licenses being given out to specific groups … I think really we’re seeing some change there, maybe some of these trade tensions are starting to soften.”
BMW also said Wednesday that it has obtained a license to provide ride-hailing services in the Chinese city of Chengdu, making the German automaker the first foreign company to do so in China. It will face stiff competition from local players including Didi Chuxing and Meituan Dache.