EV Market Development Pathways – An Application of System Dynamics for Policy Simulation

The transport sector, in particular road transport, is a major consumer of energy and a major source of greenhouse gas (GHG) emissions, contributing to climate change. There is increasing pressure to reduce CO₂ emissions from passenger cars (e.g. in the EU, the Regulation (EC) No 443/2009 sets the limit of CO₂ emissions of new passenger cars to 95 g of CO₂ from 2020 [1]). Today, the global vehicle stock has more than 1 billion units and relies almost entirely on oil-based energy. According to various projections, the global vehicle fleet could double or even triple by 2050. The energy and environmental implications of such increase would not be negligible. In this context, it is argued that the electrification of the global vehicle fleet emerges as a desirable goal. Electric vehicles (EVs) are expected to help meet key energy and environmental goals, leading to a decrease in oil imports, an increase in energy independency and to a decrease in CO₂ emissions. This paper focuses on the EV market penetration in key OECD countries as well as in China and India, considering various vehicle technologies for passenger light-duty vehicles (PLDVs). In particular, the paper investigates the impacts of EVs on oil demand and CO₂ emissions in the countries of interest under various scenarios until 2050. For this purpose, a System Dynamics (SD) model is developed and the results of various simulations assessed. The output of the model includes possible future market shares of EVs as well as their specific energy and environmental impacts. Our results show to what extent EVs can potentially contribute to reduce oil dependency and CO₂ emissions in the countries analysed beyond 2030.