Electric vehicles (EVs) could make up 15% to 35% of worldwide new vehicle sales in 2040, says IHS Markit, a specialist in critical information, analytics and solutions.

The findings are part of a new research project, ‘Reinventing the Wheel’, that the company will conduct over the first half of 2017.

“The key question is whether we are approaching a transformative shift akin to the first decade of the twentieth century, when the internal combustion engine, cheap gasoline, bicycle technology and mass production combined to usher in the automotive age,” says IHS Markit vice chairperson Dr Daniel Yergin.

“Converging developments along multiple tracks are leading us to focus on this important question.”

While electric vehicles constitute a small percentage of the world’s vehicle sales and are just 1% of the on-road fleet today, sales in 2016 are up more than 1 000% since 2010—a trend that IHS Markit expects to continue – with the potential to make EVs more than one-third of new-vehicle sales in 2040.

“Significant advances in battery technology, financial support from governments, regulations and values of millennials will be key factors leading to increases in electric vehicle adoption,” notes Jim Burkhard, study co-director and chief of research at IHS Markit for crude oil markets and energy scenarios.

Electric vehicle share in individual markets will vary based on these factors. For instance, in China and Europe—regions where policies are favourable to EVs —IHS Markit estimates that EVs could comprise over half of new passenger vehicle sales in 2040.

The growth of EVs is one of several forces reshaping the future of transportation, all of which will be subjects of the ‘Reinventing the Wheel’ research study.

Other critical factors to be examined include the potential impacts of car sharing, ride hailing and autonomous vehicles on the transportation ecosystem.

“How and when this transformation takes shape will have significant impacts on the global economy and raises fundamental questions for the oil and gas, automotive, chemical and the electric power industries, as well as individual consumers,” says study co-director Tiffany Groode, who also heads up IHS Markit automotive scenarios.