EVs May Displace 8 Million Barrels of Oil a Day by 2040

Electronic vehicles have become a key element of the energy transition with an analyst at Bloomberg New Energy Finance expecting 530 million EVs on the road by 2040 to disrupt the global crude market.

"The implications for oil are significant, with the researcher expecting EVs to displace 8 million barrels of daily oil demand by 2040," BNEF analyst Kobad Bhavnagri said in a conference in Shanghai, Bloomberg reported.

China is not only interested in EVs for the domestic market, but the world’s most-populous nation is aiming to become a globally competitive automaker by the 2020s with the latest EV technology. Long-term, EVs will likely account for 8% of total vehicle sales by 2025, 24% by 2030 and 54% by 2040, according to BNEF.

“The disruption will come very fast because of economies of scale,” said Tomas Kaberger, chair of the executive board at the Renewable Energy Institute in Tokyo.

Technology is always a topic of conversation in energy circles, especially among some energy economists and policymakers who say dramatic breakthroughs are needed to achieve the reduction in emissions needed to stave off the worst impact of global warming. But experts warn not to expect any huge development in the imminent future. Rather, clean energy technologies like solar and wind will continue to eke out gains by becoming cheaper and more efficient, or in the case of batteries, able to store more energy in the same amount of space.

“We are going to see continued industry-based learning that will bring down costs,” Kaberger said.

Others see the necessity for a bigger leap in technology.

“We need to see negative emissions,” said Yukari Yamashita, a board member and director of energy data and modeling at the Institute of Energy Economics, Japan, who sees the need for new technologies such as space-based solar energy to close the gap.

It comes as battery costs are coming down and energy densities are increasing. Battery pack prices fell about 74% from 2010 to 2016, according to BNEF. In turn, battery manufacturers are ramping up capacity, which is good news for Asia where most of the battery capacity is centered.