By 2025, Electric Cars Will Reduce Oil Demand Equal To Iran’s Output

Tesla Model 3 competitor

OCT 26 2017 BY STEVEN LOVEDAY 34

Electric Cars

Tesla Model S

Barclays says electric cars will diminish oil demand equal the amount of Iran’s total output by 2025.

Yes, the firm’s commodities analysts are tagging a drop by 3.5 million barrels per day. This is not the first analysis of its kind and surely won’t be the last. More and more projections are looking at larger numbers. If electric cars can reach a market saturation of just one-third of all cars globally, oil consumption could drop by a whopping 9 million barrels each day. Barclays projects by 2040, one-third of cars will be electric.

Electric Cars

Chevrolet Bolt EV

Currently, EVs only make up about 0.2 percent of the vehicles on the road globally however, the growth is not only constant, but accelerating (with plug-ins accounting for 1% of all new light vehicle sales).

Today’s somewhat muted numbers are partly due to the fact that the technology is new and there are still notable barriers.  The charging infrastructure is just beginning to grow, and battery costs are still elevated. But, as more companies are making definitive plans to go electric, this is sure to change more rapidly. Not to mention the fact that several countries are putting legislation in place that could lead to an outright ban of gas and diesel-powered vehicles in the future.

Barclays also cites improved fuel efficiency in its forecasts for a reduction in oil consumption. This is to be expected since many companies have made significant strides to manufacture more efficient vehicles. While a handful more pure electric cars are just now coming to market, we continue to see more plug-in hybrids and even traditional hybrids on global roads. As more automakers move away from gas engines completely and away from traditional hybrids, oil consumption will take a measurable hit. Eventually, as battery energy density improves, costs drop, battery demand causes an increase in battery production, and charging infrastructure vastly improves, the reliance on oil will plummet.

Currently, world oil demand is at 96.8 million barrels a day. So even by 2040, when Barclays says need will drop by 9 million barrels per day (which is about 90 percent of Saudi Arabia’s daily output), this is still less than 10 percent of the global daily demand for oil and other factors can still make up this shortfall.  Over time, electric cars will continue to saturate the global market, especially as countries ban ICE vehicles, but it will take more than just EVs to help eliminate oil dependency at a greater rate. However, electric vehicles will play a huge role in taking a leap in the right direction.

According to the International Energy Agency, global sales of electric cars jumped by 40 percent in 2016, and each month this percentage increases. The drop in demand for oil is imminent, it’s just a matter of how much and when. These forecasts assume that more people will continue to move to electric cars. Today, the low price of gas may be holding adoption back to some extent, along with the higher price associated with electric vehicles.

As we are already seeing a decrease in the price of electric vehicle while their ranges and abilities are increasing, there’s no doubt that ‘Big Oil’ is in big trouble, and it’s becoming increasingly clear that the industry is well aware.  At this point, it’s really just a matter of time.

Source: CNBC

Categories: General

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34 Comments on "By 2025, Electric Cars Will Reduce Oil Demand Equal To Iran’s Output"

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Alan

Tragic !

F150 Brian

Aviation, navigation, road and railroad traffic combined use about 2/3 of the oil produced (couldn’t quickly find a global personal vehicle consumption chart).

So even when all personal vehicles are 100% electric, big oil will probably still have sales of 60+ million barrels a day.

Someone out there

Aviation and navigation will possibly use hydrogen in the future. Railroad is already electrified in civilized countries so that’s already solved.

energymatters

Technically solved maybe. NOT operationally solved. Operations are what counts.

Someone out there

Railroad? That is already electric in Europe

Gazz

In the UK they have pretty much given up on electrifying existing rail ?

Asak

The UK is kind of a basket case though.

Victor

Electryfying Europe’s rail? No. A lot us still diesel and will not be electrified. Too expensive.

mzs.112000

Here in the US, most trains use diesel-electric locomotives. I know this because my town has tons of railway everywhere, and trains go by, less than a mile from my house.

So, you could say, the trains are all hybrids.

Paul

Sadly they are not proper hybtids, since coasting and breaking energy is not recaptured at all.

eltosho

Autonomous electric trucks and electric short route planes will probably kill rail.
And a large part of maritime transport exists only to move oil, coal and natural gas.

ItsNotAboutTheMoney

https://streets.mn/2013/03/26/when-cities-get-serious-about-climate-change/us-transportation-oil-use/

Old data, but you get the idea.
0.61 x 0.67 ~= 0.41. So, 41% of use would be eliminated.

If total electrication of light vehicles were possible it would imply cheap, capable electrification that would also spread to other transportation sectors.

It would cause not only a significant reduction in use, but a significant reduction in the economic effects of price volatility.

Someone out there

I’ve said before that I think all new cars will be electric by 2030. You will not be able to buy a new ICE in 2030. Once the battery tech is “good enough” there will be no demand for ICE vehicles and it will be because of the enormous profits for anyone who cracks that nut.

Of course there will still be old cars on the streets so the oil demand will still be significant but surely quite a bit lower than today.

Ron M

Well global production is about 90+ million barrels a day so getting down to 0 million by 2025 would be great

mx

So, if you’re in the stock market and a standard Index Fund, you need to MOVE to a Non-Carbon ETF, like:
SPYX
LOWC
ETHO

Take your pick.
Because it looks like stock prices for the “Energy Sector” are never coming back. And even if they have a high oil price year, that will simply drive more people quicker to EV’s.

NOTE: And the Year To Date returns of these three ALL Out Preform the Standard S&P 500 ETF: SPY.

So, not only are you directing companies to go greener by getting out of carbon, your MAKING MORE MONEY TOO.

Pushmi-Pullyu

WOW! a hardcore, naked stock pumper ad in a “comment” on InsideEVs?

I hope you’re banned, immediately.

mx

Nitwit. These aren’t stocks. They’re ETF’s. They’re Broad Index Fund ETF’s. In other words, if 1000 insideEV readers went out and bought 10,000 shares each, it wouldn’t move the needle of the ETF price.

So, no I won’t profit if you buy these ETF’s. But, you would.
Isn’t that amazing?

Another Euro point of view

Cars electrification will certainly have a significant impact on oil demand now lets not forget that by 2025 likely a billion more Chinese, Africans, Indians will adopt middle class consumerism habits thus consuming plastic goods, flying around, buying things transported by containers etc.. etc… So would be cautious in predicting what global oil demand will be in such short term horizon (2025 is like tomorrow). If by 2025 car electrification could help to keep somewhat under control still increasing oil demand that would already be great.

Pushmi-Pullyu

Thank you for that reality check.

Altho I think the #1 use of petroleum is for fueling transportation, a lot of it also goes to manufacturing plastics and other products. That’s not going to stop even when all cars, trucks, boats, ships, trains, and low-speed aircraft are fully electric vehicles.

However, plastics can be made with sugar instead of petroleum; it just costs a bit more. The human species can end fossil fuel use… if we really want to. We can even use fully synthetic aviation fuel instead of using petroleum for that, if we’re willing to pay more for a plane ticket and more for air freight.

ffbj

..it’s only the beginning, only the beginning:
https://www.youtube.com/watch?v=lI-BMDnti4c

pjwood1

It would be great to see more assumptions. 3.5 barrels a day must imply a certain MWh, or GWh, increase in electric demand. We’re seeing more studies on that side, too. S&P came out with a 10-15 annual TWh increase from EVs, by 2022. Adoption rates are all over the map. One factor is that even when cost parity is reached in making the two different vehicles, electric car demand is apt to suffer as manufactures also try and recover lost service revenues in their price. The battle has a long way to go before willingness to move electric vehicles grows.

Last night, a frequent Youtube search on ‘Tesla’ brought up the first four hits, with limited ~200k views, all spreading negative BS. That has an effect on oil demand, too. If they can keep those videos up the recommended (cough, purchased) list, things may not be so bad…

mx

GOOGLE Sells Out Tesla on YouTube.
That’s a good find.
Just like GOOGLE Selling out Search Results for Global Warming.

Google is a $whore$ for money.
Just like Twitter and Facebook selling out to the Russians.

Once you’re in business, you can justify any criminal or Treasonous or Immoral Act for Money: Capitalism.

Someone out there

Such a number doesn’t really tell the whole truth though. EVs are typically charged when there is low demand on the grid so even if the number of TWh increases on a yearly basis, most of it will be covered by spare capacity that is already there.

Ron M

60 million

Gazz

The last oil glut was only around 200k barrels a day. Its soon adds up.

Alaa

Barclays didn’t take into account the autonomous car effect. The autonomous car will eliminate a good percentage of cars on the road, and thus we will use even less oil faster. 2040 is way to far away. We will not need the oil of Iran or Saudi by then, not only Iran’s oil.

Pushmi-Pullyu

Please explain to me how (for example) one gasmobile being driven 30% of the time instead of three gasmobiles being driven 10% of the time is going to reduce gasoline consumption.

I guess I’m dumb; I don’t get this very basic math. 🙄

I’m also far from convinced that those who share their cars out are going to continue to do so, when they realize that means they’re wearing their cars out 300% as fast, and so will have to buy a new car three times as often.

mx

Autonomous cars will be electric.
This will be from Economic Darwinism.
The strongest, least expensive solution will survive.
The Gas Bill will kill Autonomous gas cars, along with the much greater wear and tear on the vehicle.

The new Leaf, for example, would undercut anything else on the road in economics and reliability, if it ever gets the software.

The more profitable Autonomous Companies will be all electric, a gas competitor would be driven out of business or go bankrupt.

Pushmi-Pullyu

“Barclays says electric cars will diminish oil demand equal the amount of Iran’s total output by 2025.”

Okay, and not to diminish that accomplishment, but how much will increasing car ownership in developing nations like India, increase oil demand by 2025?

We need to make gasmobiles, as well as diesel trucks, obsolete. We need to entirely replace them with BEVs, not just put a dent in their sales.

Sadly, we’ll have to settle for that being a long term goal.

ffbj

or 100k electric trikes:

Ed Stein

It wasn’t long ago that world demand was 80. 13 years. If EVs save 9 million barrels by 2040 but other uses keep increasing especially in Asia, hows2demand supposed to drop? Advances in renewables have to take off fast if that’s to happen.

Ozi

“the latest information available reveals that the level of energy consumption within the EU was, in 2015, at almost the same level as it had been in 1990; during this same period, the number of inhabitants living in the EU-28 increased by 33.3 million persons”

Ozi

“The share of renewables in gross final energy consumption stood at 16.7 % in the EU-28 in 2015, compared with 8.5 % in 2004.”
“The EU seeks to have a 20 % share of its gross final energy consumption from renewable sources by 2020”