As their prevalence in the automotive spotlight grows, EVs are increasingly on the minds of those investing in energy markets. But how much do we know about their evolving market share?
The electrification of transport has long-term implications for oil demand, power and renewables, and the metals sectors. A shift in government policy along with continued declines in battery costs will allow for an increasing penetration of electric vehicles into the light-duty vehicle market. This growth coupled with the approach of peak oil demand will displace nearly 2 million b/d of gasoline demand while increasing power demand by roughly 350 TWh in 2035. What effects do we expect to see the rise of the electric car have on these markets?
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We discuss how North America, Asia and Europe will adapt to a future with less gasoline-fuelled cars
Revolution or evolution?
The answer is complex. Numerous factors are set to stagnate transport fuel demand in the next decade or so, and EVs are only a small part of the story in the immediate future: we expect 2.4 million to be sold by 2020.
But with the advent of mid-priced electric cars such as the Chevy Bolt and Tesla Model 3 entering the consumer market, demand for EVs could grow faster than anticipated. And as battery pack costs are cut in half or more over the coming decade to $100/Kwh, they will become truly cost competitive with internal combustion engine (ICE) cars.
Post-2025, we expect EVs to start making a palpable dent in the transport sector globally, with Europe leading adoption. We expect global sales to more than triple from 4% in 2025 to 12.5% in 2035, with varying regional deviations. Europe should expect 30% of its car sales to be electric in less than two decades, with the US trailing at 20% and China's entry-level market at 15%.
By this time, EVs will displace approximately 6% of global gasoline demand.
By 2035, we expect 1.8 Mb/d of global oil demand will be displaced by electric vehicles.
Linda Giesecke, Research Director, Americas Refining and Oil Product Markets
What is the outlook for power and renewable players?
The growth of electric vehicles presents one of the largest uncertainties facing commodity markets, and rapidly changing EV economics and technology developments will disrupt oil, metals, and power markets around the world. Our power and renewables coverage explores how emerging technologies, lower commodity prices and the growing use of renewables will affect regional power markets. Improve your understanding of key regulatory and economic drivers in the energy industry to support your corporate planning and decision making.
Next in our peak oil demand series, we'll look more closely at the impacts of peak demand on the coal industry. Read our coverage on how peak oil demand could affect companies and the upstream, supply chain, metals, refining and chemicals industries.