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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…

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IEA Chief: EVs Are Not The End Of The Oil Era

Electric vehicles (EVs) today are not the end of global oil demand growth, nor are they the key solution to reducing carbon emissions, Fatih Birol, the Executive Director of the International Energy Agency (IEA), said during the ‘Strategic Outlook on Energy’ panel at the World Economic Forum in Davos on Tuesday.

According to Birol, analysts need to put things into perspective and consider that five million EVs globally is nothing compared to 1 billion internal combustion engine (ICE) cars.

“This year we expect global oil demand to increase by 1.3 million barrels per day. The effect of 5 million cars is 50,000 barrels per day. 50,000 versus 1.3 million.”

“Cars are not the driver of oil demand growth. Full stop,” Birol said.   

The drivers of oil demand growth are trucks, the petrochemical industry, and planes, with Asia just starting to fly, the IEA’s head said.

“To say that the electric car is the end of oil is definitely misleading,” Birol noted.

“Electric cars today are not the end of the oil era,” he reiterated.

EVs are not the ultimate solution to the climate change problem because most of the electricity used to charge the vehicles comes from fossil fuels, Birol added.

“Where does the electricity come from, to say that electric cars are a solution to our climate change problem? It is not,” he said.   

In its latest Global EV Outlook, the IEA said last year that the outlook for EVs is bright, but requires ambitious targets. According to the agency, the number of electric cars on the road could reach 125 million by 2030 under the IEA’s New Policies Scenario, which includes national pledges made for the Paris Agreement.

Some environmentalists have been accusing the IEA of skewing its findings and policies toward favoring the oil and gas industry. According to a 2018 report from Oil Change International, the IEA “is holding governments back” from achieving the Paris Agreement goals, as the IEA’s New Policies Scenario roadmap “steers those decisions towards levels of fossil fuel use that would cause severe climate change.”

By Tsvetana Paraskova for Oilprice.com

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  • James Hilden-Minton on January 22 2019 said:
    Sadly the IEA is mistaken about EVs.

    About 1 billion motor vehicles consume about 50mb/d of diesel and gasoline. Replacing 5 million with a mix of light duty and heavy duty vehicles offsets demand for about 250 kb/d. IEA is off by a factor of 5.

    Moreover, replacing other vehicles with new higher efficiency vehicles also reduces demand for motor fuels. It is only growth in the total size of the ICE fleet that is driving demand growth for motor fuels.


    The fleet of EVs stands at about 5 million in 2018, up 2 million from prior year. At 60% annual growth rate. At such a rate, the fleet grows to 125M in seven year, 2025. This is 5 years earlier than IEA is reckons.

    Moreover, if the fleet were to grow only to 125M by 2030, this would imply an annual growth rate of 30%. It is unrealistic to assume such a low rate for the next 7 years while the cost of EV batteries is falling upwards of 20% per year.

    So if 5M EVs offset about 250kb/d of motor fuel, the energy needed for charging is only about 80 GWh per day. About 20 GW of solar or 10 GW of wind suffices to energize this fleet. This is less than a tenth of the renewable power installed in 2018 alone.


    So what if EVs reach 125M by 2025? This avoids some 6 mb/d in incremental demand for motor fuels over the next seven years. With crude demand growing at a mere 1.3 mb/d per year, this may well arrest annual demand growth for crude by 2025. It is unlikely that petrochem and jet fuel demand can make up for 6 mb/d underperformance in motor fuel demand growth.

    What should be clear is that EVs have reached a scale of growth that will have a material drag on motor fuel demand growth. It was about 100 kb/d of demand erosion in 2018 and will continue to grow exponentially. The IEA does a disservice to the public to dismiss this demand erosion so lightly. In the coming years this will become increasingly obvious.
  • John G on January 22 2019 said:
    Increasingly EVs are fueled by solar/wind/hydro. And, even if they are fully fueled by coal they are still more efficient than pure ICE cars.
    And the required - I'll believe IEA's predictions when/if they actually get one right.

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