Chevy Bolt

Chevy Bolt

Energy consulting firm Wood Mackenzie is releasing a new report showing that gasoline demand could be cut by as much as 20% over the next two decades due to electric vehicles. Earlier reports put the reduction at only 5%, but the new information shows that it could be much more.

BMW i3 And Tesla Model S

BMW i3 And Tesla Model S

If electric cars gain over a 35% market share by 2035, the numbers Wood Mackenzie is projecting will become a reality. The U.S. uses over nine million barrels of gasoline per day. The 35% increase in electric vehicle market share would hypothetically save about two million barrels a day.

For this to come to fruition, Tesla Motors, GM, Nissan and other competitors will have to have quick and consistent, continued successes with delivering low-cost, long-range electric vehicles.

Parajit Ghosh, author of the Wood Mackenzie report said:

"The Model 3 is planting a flag. With time, it has the potential to be a disruptive force in the market.”

Tesla's 400,000 Model 3 orders, paired with the top competition in the Chevy Bolt arriving soon and the second generation Nissan LEAF thereafter, and now other companies rushing to catch up, is a recipe for the forecast to come true. BMW, Hyundai, and VW are all working on long-range electric vehicles and Ford is investing billions into 12 new electric vehicles over four years. Volvo is set to produce one million electric vehicles by 2025.

However, on the conservative end of the scale, Wood Mackenzie said electric cars making up 10% of the market share by 2035 would drop U.S. gas demand 5%. With the above companies moving forward and the Model 3's potential to push electric cars into the mainstream by 2025, much can happen in the years ahead, and the demand for gasoline will decrease significantly over time.

Source: MarketWatch