Oil demand could peak in the 2030s if the electric car boom proceeds as promised by the world’s green energy innovators, according to OPEC.
The annual release of the bloc’s World Oil Outlook points out that if just a quarter of the world’s cars run fully on batteries, demand would plateau at 109 million barrels per day between 2035 and 2040.
“It is highly unlikely that electric vehicles will penetrate the passenger car segment with this strength in less than 24 years,” according to the report published on Tuesday. “Nevertheless, several countries have publicly stated their intention to achieve an even higher share of electric vehicles in new sales.”
In the United States and Canada, the adoption of ride-sharing apps and fuel-efficient cars should result in a seven percent demand drop by 2040 as well, continuing the trend in declining oil demand without the direct public sector push seen in parts of Asia and Europe.
There has been a change in traction for EVs in just the past year or two, with the vehicles going from a niche idea even in long-term forecasts, to one that many believe will increasingly take market share from the traditional internal combustion engine. There are many reasons for this – policy and market forces are reinforcing each other to bring the EV revolution closer and closer.
The falling cost of batteries have made EVs much more competitive, and EVs could become cheaper than gasoline or diesel-powered vehicles between 2025 and 2029, according to Bloomberg New Energy Finance (BNEF). BNEF predicts that EVs will capture more than half of all new auto sales by 2040.
But government policies could accelerate this trend. The UK and France have announced a phase out of the internal combustion engine, banning their sales by 2040. China and India have also announced tentative steps in that direction, which, if finalized, would totally change the game.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…