There will be 280 million EVs on the roads in 2040, up from 2 million today—but even this increase won’t be able to stifle crude oil demand, the International Energy Agency says. This increase will come from government policies aimed at tackling climate change and from the industry’s apparent determination to go electric.
Even so, the IEA said, global oil demand will continue growing in tune with supply, to hit 105 million bpd in 2040, driven by petrochemicals and fuel for trucks, ships, and aircraft. The IEA notes that although current fuel efficiency policies cover about 80 percent of the global passenger sales today, it only covers half of truck sales.
The IEA, however, does not mention electric trucks in its World Energy Outlook. Daimler earlier this year showcased the world’s first fully electric truck. Tesla will unveil its own e-truck, the Semi, on Thursday, and Elon Musk promises it is “unreal.”
Even if it is not exactly unreal, Tesla’s semi and the Daimler truck can potentially disrupt a market worth tens of billions of dollars globally. There are challenges, notably range and cost, but electric trucks are an emerging niche that should be taken into account in long-term forecasts. UPS, for example, recently said it will be converting a fleet of 1,500 diesel-fueled delivery trucks into all-electric vehicles. It will hardly be the first and last one to consider the conversion. Related: The War That Would Transform Oil Markets
The IEA, however, is firm: it considers a low-oil-price scenario, in which there are 900 million electric cars on the roads by 2040. In this scenario, though, oil prices are low because of strong production growth in the United States. This production growth would keep prices in the US$50-70 per/barrel range, which will only serve to keep demand for oil steady.
The main drivers behind this growth will be India, followed by China, Africa, the Middle East, and Southeast Asia, with South America and Eurasia trailing the rest. Meanwhile, oil demand in Europe, the U.S., and Japan will fall, though by rates markedly smaller than the demand growth rates in India and China.
By Irina Slav for Oilprice.com
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