Plug-in electrified vehicles (PEVs) could constitute up to 60 percent of all vehicles on roads by 2030 in densely populated, high-income cities such as London and Singapore, according to a new study.

With stricter emissions rules being enforced by cities, falling technology costs, and more consumer interest, McKinsey & Co. and Bloomberg New Energy Finance forecast drastic changes in vehicle registrations in the next 14 years. The research report was presented at the Future of Energy Summit in London on Tuesday by the consultancy and media company.

Reaching a turnover from internal-combustion engine vehicles to PEVs will come from cities enacting low-emission zones, along with growing consumer interest and favorable economics, the report said.

Cities such as Paris and London are enforcing restrictions on the use of older, polluting cars and are considering tougher rules. New rules in Paris, which took effect on July 1, bar vehicles built before 1997 and motorcycles built before 1999 during weekday daylight hours.

The study also acknowledges the threat this forecasted trend imposes on automakers, which is reinforced by growth in mobility and transportation services offered by firms such as Uber and Lyft.

“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.

PEVs being deployed in dense urban environments governed by tough emissions rules was a theme at the Paris Motor Show, where Volkswagen Group and Daimler revealed their electrified mobility campaigns.

Volkswagen presented its I.D. concept car at the Paris auto show, an electric car that brand chairman Herbert Diess said will sell for about the price of a Golf diesel. It marks the first of 30 new PEVs that VW plans for its lineup by 2025.

Daimler CEO Dieter Zetsche said the company’s Mercedes-Benz brand will launch 10 PEVs under a new sub-brand called EQ. Zetsche said it will be the market leader in premium electric cars by 2025.

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Price competition will be part of it, with declining battery costs making it more viable.

The cost of a lithium ion battery pack fell 65 percent in 2015 to around $350 per kilowatt hour. That came down from $1,000/KWh in 2010, and is expected to fall below $100/KWh over the next decade, according to the report.

Gasoline retailers will need to follow a different approach in the future to monetize their current assets. They’ll need to examine gaining more value from charging PEVs, the retail market, and fleet services, reported Automotive News.

“Electric vehicles could take off anytime,” as shifts in social preferences cannot be modeled, said Spencer Dale, BP’s chief economist, during the summit.

Automotive News