Will EVs Change Oil Consumption?

Electric vehicles (EVs) appear to be the wave of the future, according to a leading UK car buying group.

Although EVs currently account for about 1 percent of the world’s vehicle sales, carmakers worldwide are anticipating greater public acceptance and demand and are introducing dozens of new makes and models.

In 2018 Volkswagen introduces an EV Audi SUV.  Mercedes-Benz, Jaguar, Volvo, and General Motors are also promising new models to roll off the assembly line by 2020.

Part of the growth in EVs is due to constantly falling battery prices combined with increased speed, performance, and vehicle range, which has resulted in better car-buyer acceptance.  Fast-charging station availability is also increasing worldwide with VW announcing plans to build a network of high-speed charging station in the US to compete with Tesla’s Superchargers.

EVs have proven to be most competitive in the luxury car market; Tesla’s Model S is the best-selling large luxury car in the US.  However the coming wave of EVs may well change that statistic.

Bloomberg New Energy Finance founder Michael Liebreich says that by “2020 there will be over 120 different models of EV across the spectrum. These are great cars. They will make the internal combustion equivalent look old fashioned.”

Toyota plans to completely move away from fossil fuel powered cars by 2050 while Volkswagen is aiming for one-fourth of its sales to be EVs by 2025.

While EVs effect on oil consumption is minimal at the moment, the impact is coming.  One of the world’s largest oil producers, Total SA, say they expect one-third of new car sales at the end of the next decade.

Electric cars are coming fast — and that’s not just the opinion of carmakers anymore. Total SA, one of the world’s biggest oil producers, is now saying EVs may constitute almost a third of new-car sales by the end of the next decade.

Other oil companies are researching the potential effect of EVs as well.  Ben van Beurden, CEO of Royal Dutch Shell, has stated they expect the demand for oil to peak in the late 2020s and is looking at the development of profitable clean technologies.

Other observers take Beurden’s view even further stating that not only will demand peak and level-off by the end of the next decade but that demand will actually decrease.