Electric cars could represent 60 per cent of cars on road in Singapore, London

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LONDON - Electric vehicles could account for two-thirds of all cars on the road by 2030 in wealthy cities such as London and Singapore due to stricter emissions regulation, falling technology costs and more consumer interest, research showed on Tuesday.

Electric vehicles (EVs) are becoming far more common. To help lower harmful greenhouse gas emissions, governments are trying to encourage their uptake through subsidies and tax breaks and introducing low-emissions zones.

Technology costs are also falling rapidly. The cost of a lithium-ion battery pack fell 65 per cent in 2015 to around $350 per kilowatt hour, from $1,000/KWh in 2010, and is expected to fall below $100/KWh over the next decade, a report by consultancy McKinsey & Co and Bloomberg New Energy Finance (BNEF) showed.

"In densely populated, high-income cities like London and Singapore ... electric vehicles could represent as much as 60 per cent of all vehicles on the road by 2030, the result of low-emission zones, consumer interest and favourable economics," the report said.

However, the growth of EVs could be a threat to the automotive sector.

"The automotive sector faces a future that could be fundamentally different from its past and may need to consider moving from using a pure product-ownership model toward providing a range of transportation services," the report said.

Gasoline retailers should also be considering further monetisation of their current assets and how to get more value from electric charging, the retail market and fleet services.

At a BNEF Future of Energy Summit in London on Tuesday, BP's chief economist Spencer Dale said: "Electric vehicles could take off anytime," as shifts in social preferences cannot be modelled.