By 2035, EVs may remove 1-2 million barrels a day of oil demand.
By 2035, EVs may remove 1-2 million barrels a day of oil demand.

EVs Could Take Huge Bite From Oil Demand

EVs Could Take Huge Bite From Oil Demand

A boom in electric vehicles made by the likes of Tesla Motors Inc. could erode as much as 10% of global gasoline demand by 2035, according to the oil industry consultant Wood Mackenzie Ltd.
While battery-powered cars and trucks today represent less than 1% of total vehicle sales, they are expected to take off after 2025 as governments move to tackle pollution and costs fall, the Houston-based analyst said, Bloomberg reported.
By 2035 so-called EVs may remove 1 million to 2 million barrels a day of oil demand from the market—in the range of the production cut OPEC and its allies agreed this week in order to end a three-year crude surplus.
“Anything that reduces the demand for transportation has an impact on the oil market,” Alan Gelder, vice president of refining, chemicals and oils markets at Wood Mackenzie, said in an interview in London. “The question is how big it is going to be and what’s the time frame.”
Wood Mackenzie’s view echoes the International Energy Agency, which last month forecast global gasoline demand has all but peaked because of more efficient cars and the spread of EVs. The agency expects total oil demand to keep growing for decades, driven by shipping, trucking, aviation and petrochemical industries.
On Friday, Athens, Madrid, Mexico City and Paris pledged to phase out diesel vehicles by 2025 in a battle against pollution, a move that could further stimulate demand for EVs that have zero tailpipe emissions.
Regulation and government subsidies alone will not be enough to spark a boom in EVs, Gelder said. “If there’s a technology revolution, so battery technology gets cheaper and EVs don’t need a subsidy, then it comes down to consumer preference. If the consumers like something, it’ll switch far faster.”
Tesla alone will not be able to supply enough EVs if demand really takes off, Gelder said. Major automakers including Volkswagen AG and Ford Motor Co. will need to produce them on a larger scale. “At the moment they can’t, and changing manufacturing lines takes time.”

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