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Big oil just woke up to the threat of rising electric car demand

BP anticipates 100 million EVs on the road by 2035, a 40% increase in its outlook

Jess Shankleman | Bloomberg 


The world’s biggest producers are starting to take electric vehicles seriously as a long-term threat.

quintupled its forecast for sales of plug-in EVs, and producers from to BP also revised up their outlooks in the past year, according to a study by (BNEF). The London-based researcher expects those cars to reduce demand 8 million barrels by 2040, more than the current combined production of Iran and Iraq. 

Growing popularity of EVs increases the risk that demand will stagnate in the decades ahead, raising questions about the more than $700 billion a year that’s flowing into fossil-fuel industries. While the producers’ outlook isn’t nearly as aggressive as BNEF’s, the numbers indicate an acceleration in the number of EVs likely to be in the global fleet.

“The number of EVs on the road will have major implications for automakers, companies, electric utilities and others,” Colin McKerracher, head of advanced-transport analysis at BNEF in London, wrote in a note to clients. “There is significant disagreement on how fast adoption will be, and views are changing quickly.” BNEF expects electric cars to outsell gasoline and diesel models by 2040, reflecting a rapid decline in the cost of lithium-ion battery units that store power for the vehicles. It expects 530 million plug-in cars on the road by 2040, a third of worldwide total number of cars.

The Organisation of Petroleum Exporting Countries raised its 2040 fleet prediction to 266 million from the 46 million it anticipated a year ago. Battery cars under the new projection account for 12 per cent of the market within 23 years, compared to 2 per cent in the 2015 forecast. Based in Vienna, the group representing 14 nations expects half the number diesel vehicles as it did a year ago.

making similar expectations according to the BNEF note include:

The Energy Agency more than doubled its central forecast for EVs, raising its 2030 fleet size estimate from to 58 million from 23 million. boosted its 2040 estimate to about 100 million from 65 million.

BP anticipates 100 million EVs on the road by 2035, a 40 per cent increase in its outlook compared with a year ago. Statoil ASA, the Norwegian state company, says EVs will account for a 30 per cent of new sales by 2030.

Just a fraction of the world’s cars sold today are powered by batteries instead of gasoline. Many analysts increasingly say the market will expand rapidly as almost all major auto makers bring dozens of new models to market. said in its market report on Wednesday that electric vehicle sale targets could dampen demand in some parts of Asia as soon as 2018.

Long-term growth depends on a wide range of factors, including policy decisions by governments seeking to tackle air pollution to the cost of the lithium-ion batteries that account for about a third of the cost of each one. 

First Published: Sun, July 16 2017. 01:35 IST