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Nick Cunningham

Nick Cunningham

Nick Cunningham is an independent journalist, covering oil and gas, energy and environmental policy, and international politics. He is based in Portland, Oregon. 

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EV Sales To Triple By 2020

Electric vehicle sales are finally starting to take off in larger numbers, surpassing 1 million in 2017 after growing 56 percent from a year before. By 2020, sales are expected to rise to about 4 million and before jumping to 21.5 million in EV sales by 2030.

The grow rate of EV sales has been rather high for several years, but always from a low base. Now that base is starting to build, making the additions more meaningful. The global EV stock grew above 3 million last year, but could triple to 13 million over the next two years, according to a new report from the International Energy Agency. Electric buses are also making rapid headway, with the stock rising to 370,000 units, almost exclusively because of China.

The falling cost of batteries is a crucial ingredient in the acceleration of EV sales. The high cost of batteries are the main reason why EVs cost more than a traditional gasoline or diesel-powered vehicle, so ongoing cost declines are a pivotal factor in the success of EVs.

(Click to enlarge)

Norway has “the world’s most advanced market of electric cars” with a 39 percent market share for EVs, while China is far and away the leader in absolute numbers.

As the IEA notes, the countries with the most success in rolling out EVs have led with policy support, including public procurement programs, financial incentives, fuel-economy standards, and restrictions on vehicles based on emissions. Related: OPEC Unlikely To Open The Oil Taps In June

Norway is an interesting case since EVs have grabbed nearly 40 percent market share in terms of sales in just a few years. Norway offers EVs exemptions for a value-added tax (VAT) and registration tax, free access to toll roads and tax rebates. Meanwhile, the Netherlands actually saw a dip in EV sales and market share over the past few years after a tax change, demonstrating the strong link that EV sales have with policy at the moment.

Over the long-term, a growing list of countries are set to ban the internal combustion engine, forcing a phase out of gasoline and diesel vehicles. France and the UK will do it by 2040, Scotland by 2032, while Ireland, the Netherlands and Slovenia will implement bans by 2030. Norway is aiming for 2025. An even longer list of cities – including Los Angeles, Paris, Rome, London, Cape Town, Mexico City and more – will introduce access restrictions on their roads for gasoline and diesel vehicles, many of which will be implemented by 2030.

So, while EVs still depend on policy support, the trend is clear: EV costs are declining, while restrictions on gasoline and diesel will rise.

Looking forward, the IEA’s main scenario, which incorporates existing and announced policies, sees the EV stock reaching 125 million by 2030, a figure that would balloon to 220 million if more aggressive climate policies were adopted.

(Click to enlarge)

The 3 million EVs already on the roads last year displaced about 0.38 million barrels per day (mb/d) of oil demand. By 2030, EVs will knock off 2.57 mb/d of oil demand, or 4.74 mb/d in the more aggressive scenario incorporating more climate policy. Related: Emerging Market Meltdown Could Undermine Oil Rally

Even the higher number is a rather small figure in a 100-million-barrel-per-day oil market, but prices are largely decided at the margins. U.S. shale was largely responsible for crashing the entire market in 2014 after adding nearly 4 mb/d over the course of a few years. Oil demand won’t disappear overnight, but as EVs scale up, they could certainly keep a hard cap on oil prices, more or less permanently.


The report comes a week after Bloomberg New Energy Finance came to similar conclusions. BNEF said that EVs will beat the internal combustion engine on cost within a decade, putting EVs on track to capture a majority of auto sales on an annual basis by 2040. That would erase more than 7 mb/d of oil demand by that date.

Obviously, these forecasts should be taken with a grain of salt – forecasting over that length of time inherently involves a lot of guesswork. The precise numbers are a bit beside the point. The main takeaway is that the trend is only going in one direction – EVs growing and cutting into oil demand. We can debate about the pace of transition, but the transition is coming.

By Nick Cunningham of Oilprice.com

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Leave a comment
  • Tom on May 30 2018 said:
    One way to better compete with the electric car may be to make gasoline cars cleaner and more efficient. Ethanol could be of value here, if the oil industry is interested. We need affordable high octane fuel, octanes on the order of 98 to 100 to get maximum efficiency out of gasoline internal combustion engines. We also need reduced emissions to compete with the cleaner electric car. For the last 12 years the oil industry has fought ethanol, tooth and nail, the clean burning, high octane blending agent that can best help them compete with the electric car! Every time I read about another new advancement in battery technology, I wonder, if the oil industry and API will ever wake up, or are they committed to flying their airplane into the ground. While Refiners are lining up for waivers to keep from producing cleaner fuels, consumers are lining up at TESLA to purchase electric cars.
  • snoopyloopy on May 30 2018 said:
    These forecasts continue to miss the mark on the low side, but it hasn't been really noticed both because overall numbers and the percentage of sales remain small. That changes in 2018. Not only will the Model 3 finish in the top 10 of sales nationwide (barring any catastrophic occurrences at either Tesla factory), but we will also see a host of other capable EVs hit the road including the Jaguar i-Pace, the Hyunda Kona EV, and the Kia Niro EV. That's a marked departure from the "compliance cars" of yesteryear that made good lease candidates to get in the carpool lane, but little else. (Tens of thousands of those vehicles are also coming off lease as people move up and will be available on the used market for people looking to consider electric but aren't looking to spend a lot on it.)

    We also are seeing the proliferation of plugs via PHEVs and that it is becoming price competitive at the dealership BEFORE incentives (e.g. BMW 530e MSRPs for the same price as the 530i and is still eligible for tax credits and rebates). As more people start driving even a portion of their miles electric, they'll both be interested in driving electric more often and considering an actual EV as their next vehicle.

    Finally, the Electrify America expenditure will have a hugely positive effect on sales as well as people start to see EVs out in public and talk to the owners about what it's ACTUALLY like to own an EV. Coupled with the proliferation of charging opportunities to vanquish "range anxiety" and the more capable options hitting the market at the same time, most every automaker will be scrambling to increase production of their EVs by the end of the year. This will be even more pronounced if oil prices stay at current levels or trend even higher.
  • Peter Robert Breedveld on May 31 2018 said:
    A car gasoline tank cost about $900 at a parts store. It probably cost a lot less for auto makers. Plus gas tanks usually last as long as the car and you don't have to do anything to maintain them. They are simple, reliable and cheap. That is some pretty tough competition for batteries.
  • citymoments on May 31 2018 said:
    With all due respects to author, he obviously overlooks one very important fact: What is technologically achievable is not equal to what is commercially sustainable. When he is talking about all these rosy EV targets, it comes with lofty government tax rebates and subsidies, without those rebates and subsidies, ALL EV cars are loss making businesses; as matter of a fact, the biggest EV Car maker, the darling Tesla, never made a dollar but lost billions of dollars fro so many years. Why only capitalist economy creates real wealth? Because it demands all businesses must be conducted by loss and profit report, it compels the producer's output must outnumber input. Any production supported by Tax rebates and subsidies are taking profit from other profitable industries to support loss making economy like EV car. EV economy is another socialist economic experiment by our incompetent politicians and entrepreneur con artists, it creates not wealth but waste and poverty.
  • Dan on May 31 2018 said:
    Ethanol destroys my car engine. Farmers don't care but I do.

Leave a comment

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