The number of electric vehicles (EVs) on the road is expected to increase from the current 3 million to 300 million by 2040, according to a report by UK-based analytics firm Global Data

Electric vehicles are also expected to account for 15 per cent of new passenger vehicles by 2030, up from the 1 per cent in 2017.

According to the report, a more widespread acceptance of the electric vehicle, along with the connected car, autonomous vehicle driving (AV) technology and transport-as-a-service, will reshape the global automobile market.

“Over the next five years, we expect stress, strain, and margin evaporation and shake out across much of the legacy automotive industry and its Tier-1 parts suppliers as a slow growth industry incurs the expense of conversion to electric vehicle and autonomous driving technology,” the report says

The report further warns that ride-sharing services and shifting urban millennial priorities could lead to peak car, or the start of a period of falling new car sales.

In terms of suppliers, the report envisages that US-based Tesla’s dominance of the high-end EV market will be challenged by efficient internal combustion engine (ICE) car makers such as Toyota, Honda and BMW, among others, as these companies scale up production of EVs from 2022 onwards.

Start-ups such as China-based NIO and Byton and UK-based appliance manufacturer Dyson, which is investing $2.7bn to develop an electric vehicle, are also expected to challenge Tesla’s dominance over the long-term.

In February, Dubai’s Roads & Transport Authority (RTA) placed an order for 200 electric cars with autonomous driving options with Tesla.

The deal, worth an estimated $17m-$20m, is in line with the strategy to have autonomous journeys account for 25 per cent of total individual journeys in Dubai by 2030.