The bank said the shift to electric will be underpinned by falling battery costs.
Motorists' concerns over "range anxiety" will also evaporate in the 2020s, ING said, as the distance between charges goes from the 100-150 miles of most models today to 400 miles and above in the next decade.
Eventually, by the end of the next decade, carmakers will begin focusing solely on electric models, the report said. Swedish firm Volvo recently marked the beginning of this trend, saying it would only launch hybrid, plug-in hybrid or 100% electric cars from 2019.
ING expects battery-powered cars will beat hydrogen versions on both price and infrastructure. However, the bank said that European carmakers were likely to miss out in the coming electric revolution, because Asian and American competitors had the advantage in battery technology and electric motors. "Europe's competitive advantage in internal combustion engine powertrains disappears with the shift to battery electric vehicles," the report said.
Tony Seba, an economist at Stanford University in the US who has published research on the cars, said: "Our findings clearly indicate that essentially all vehicle miles travelled will be electric by 2040 [worldwide].
"The car industry faces an imminent technology disruption by AEVs [autonomous electric vehicles] in the early 2020s. Even without autonomous technology, the internal combustion engine car industry will have been long decimated by 2040."
The flurry of electric car announcements last week, including Volvo's electrification strategy, prompted a pushback by big oil and some analysts.
At an energy conference in Istanbul this week, Anglo-Dutch firm Shell, Saudi Arabia's state oil company and the International Energy Agency dismissed the idea that electric vehicles will hurt oil demand.
article by: The Guardian