The popular claim that a surge in electric cars will hasten the arrival of peak oil demand is undermined by the data.
The majority of the world’s cars will remain powered by petrol, also commonly known as gasoline, for at least the next two decades and this will drive oil demand, according to data from Facts Global Energy.
With the number of passenger vehicles expected to grow to 1.8bn by 2040, the energy consultancy estimates only 10 per cent will be accounted for by electric cars and a further 20 per cent by hybrids.
This might sound contentious given the hype around Tesla, the flag-bearer of electric vehicle producers, and many analysts forecasting a structural decline in oil consumption. But most research simplifies the matter, suggesting that falling battery prices are tightly correlated with electric car sales.
The reality is more complex. The shift towards electric has to be supported by significant government incentives. Norway, for example, owes its success to the hundreds of millions of dollars in tax revenues diverted towards subsidies making it almost free to drive an electric car.
Today it is normal for a Norwegian to buy an electric car in addition to a petrol vehicle for daily use to save money. Without such a subsidy, sales would fall, as demonstrated in Denmark last year. When the incentive was dropped in January 2016, electric car sales plunged 80 per cent from the previous year. […]
The fate of petrol demand — and oil for that matter — will not be set in the west but in Asia, which is only at the start of mass motorisation.
Asia accounts for approximately one-third of the global light vehicle fleet of 1.1bn. FGE expects growth in the region over the next 25 years of more than 500m units, more than the growth in rest of the world combined. By 2040, almost every other car in the world will be driven in Asia.