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Electric vehicle sales are soaring, displacing larger volumes of transportation-derived fuel demand, which could peak as early as 2027, research firm BloombergNEF said in its annual Electric Vehicle Outlook report published on Thursday.
Policy support, expansion of charging infrastructure, battery technology improvement, and new models from automakers are driving and will drive a surge in EV adoption. More than 100 million passenger EVs are expected to be on the roads by 2026, and more than 700 million by 2040, up from 27 million at the beginning of this year, BloombergNEF (BNEF) says.
According to BNEF’s Economic Transition Scenario, passenger EV sales will soar to account for 26% of all passenger vehicle sales in 2025, a total of 44% of sales in 2030, and 75% of sales in 2040. Some countries go much faster, including the Nordics, China, Germany, South Korea, France, and the UK.
Despite the surge in sales, the net-zero scenario requires an even faster EV adoption, with 298 million EVs on the road by 2030 and 1.1 billion by 2040, BNEF said.
“Direct electrification via batteries is the most efficient, cost-effective and commercially available route to fully decarbonizing road transport. Still, a stronger push is needed on areas like heavy trucking, charging infrastructure and raw material supply,” said Aleksandra O’Donovan, head of electric vehicles at BloombergNEF.
As EV sales surge, EVs of all types are already displacing 1.5 million barrels per day (bpd) of oil usage, equivalent to about 3% of total road fuel demand, according to the report.
Oil demand from road transport “is very near its peak,” BNEF said.
“The rise of EVs leads to a peak in overall road fuel demand in 2027. Demand in the US and Europe has already peaked, while demand in China is set to peak in 2024,” the research firm added.
However, soaring battery demand is putting pressure on the supply chain for materials like lithium, cobalt, and nickel, BNEF noted.
By Michael Kern for Oilprice.com
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Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com,