Electric vehicle sales are set to grow by 32% annually this decade to make up half of global car sales by 2035, according to Goldman Sachs Research.

The strategists at the investment bank estimate that EV sales will rise from around 2 million in 2020 to 73m in 2040. Market share should increase from 2% to 61% during that time span, although in many developed countries, that share will be “well over 80%,” they add.

The report seen by Kallanish forecasts that the EU will be the only market to reach 100% electric car sales in 2040, at a projected 16m units. Penetration in the US should be of 85% (14m units), 80% in Japan (3m units), 68% in China (14m units) and 55% in India (6m units.) Globally, EV market share is estimated at 61% in 2040.

“We expect the automobile industry to undergo a major transformation between 2020 and 2030, driven by the increasing adoption of vehicle electrification and autonomous driving,” says Kota Yuzawa, equity research strategist at Goldman Sachs.

As EV sales grow and supply chains mature, the global car industry’s operating profits are also expected to rise. EV profits are forecast to increase from $1 billion in 2020 to $110 billion in 2030. Yet, Goldman Sachs notes that pricing power and higher earnings are more in the hands of battery makers, rather than automakers. To rebalance that pricing power, carmakers are rushing to develop vertically integrated production and joint-venture plants. The most recent announcement came from Ford and CATL on 12 February (see related story).