Electric Cars To Take a Bite Out Of Gasoline Demand In The Next 20 Years

Electric cars, which at this point are still few in number, and remain a bit of an anomaly on American roads, will increase in the ensuing decades.

Spencer Dale, who serves as the chief economist at BP, notes that the upswing in the number of electric cars probably will not happen for another twenty years, but it will happen. Dale maintains that while conventional vehicles still retain many advantages over electric vehicles, it is a matter of “when, not if.”

While the U.S. still has relatively few of them, due to a combination of lower fuel prices and batteries that need to be recharged approximately every 100 miles, better electric cars are coming on the market now that overseas automakers are answering the demands of air quality restrictions.

In the United States, Tesla is creating cars with larger batteries that can hold a charge for 200 miles, spurring other auto makers such as Hyundai, Nissan and Volkswagen to join the race.

Ford has announced its plans to develop 12 new vehicles over the next four years. Volvo wants to get one million vehicles out by 2025. Chevrolet is expected to introduce the Bolt sometime this year. A new Bolt will cost consumers $30,000 after tax credits.

The upshot of this upswing, according to a report from the firm of Wood Mackenzie, is that electric cars could decrease demand for gasoline in the United States by anywhere from 5 to 20 percent over the next two decades. The country uses over nine million barrels of gasoline a day. Should electric cars pick up a market share over 35 percent, the demand could drop by approximately two million barrels per day by the year 2035, the firm says.

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Prjit Ghosh, who wrote the report, said that those numbers reflect a speedy introduction of electric cars to the market. Ghosh contends that it is more likely that the U.S. would see a 5 percent drop in demand for gas as electric cars increase to about 10 percent of the nation’s vehicles by 2035.

The report notes that the demand for natural gas could go up to meet the increasing demand for electricity.

By Lincoln Brown for Oilprice.com

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