Bloomberg reports that according to research from Imperial College London and the Carbon Tracker Initiative’s think tank, about 2 million barrels a day of oil demand could be displaced by electric vehicles by 2025, which is equivalent in size to the oversupply that triggered the biggest oil industry downturn in a generation over the past three years.
Major oil companies are waking up to the potential disruption electric vehicles could have on their industry. According to BP Plc, electric vehicles could erase 5 million barrels a day in the next 20 years, while analysts at Wood Mackenzie say they could erode as much as 10% of global gasoline demand over that time
The report says that 16 million barrels a day of oil demand could be displaced by 2040 and up to 25 million by 2050 and it is a “stark contrast to the continuous growth in oil demand expected by industry”. The impact on the oil industry could exceed price slump of 2014-2016 that “wiped hundreds of billions off capex,” a spokesman for the Carbon Tracker Institute Stefano Ambrogi said.
The cost of EVs is already falling faster than previous forecasts and they could reach parity with conventional internal combustion vehicles by 2020, eventually saturating the passenger vehicle market by 2050, the report said.
According to researchers, EVs may take from 19% to 21% of the road transport market by 2035. That’s three times BP’s projection of 6% market share in 2035. By 2050, EVs would comprise 69% of the road-transport market, with oil-powered cars accounting for about 13%.