The impact of electric vehicles on oil consumption
As the world moves towards the electrification of the transport sector, the demand for oil will be replaced by the demand for electricity.
To highlight the impact of electric vehicles on oil consumption, the infographic above shows how much oil has been and will be saved each day between 2015 and 2025 by different types of electric vehicles, according to BloombergNEF.
How much oil do electric vehicles save?
A standard combustion engine passenger vehicle in the US uses about 11 barrels of oil equivalent (BOE) per year. A motorcycle uses 1, a Class 8 truck about 24, and a bus uses more than 258 BOE per year.
When these vehicles are electrified, the oil that their combustion engine counterparts would have used is no longer needed, displacing the demand for oil with electricity.
Since 2015, two- and three-wheeled vehicles such as mopeds, scooters and motorcycles have accounted for most of the oil saved from electric vehicles globally. With widespread adoption in Asia specifically, these vehicles displaced demand for nearly 675,000 barrels of oil per day in 2015. By 2021, this number had grown rapidly to 1 million barrels per day
Let’s take a look at the daily displacement of oil demand by electric vehicle segment.
| Number of barrels saved per day, 2015 | Number of barrels saved per day, 2025P | |
|---|---|---|
| Electric passenger vehicles | 8,600 | 886,700 |
| Electric commercial vehicles | 0 | 145,000 |
| Electric buses | 43,100 | 333,800 |
| Two- and three-wheeled electric vehicles | 674,300 | 1,100,000 |
| Total barrels of oil per day | 726,000 | 2,465,500 |
Today, while working in the commercial vehicle segment, very few large trucks on the road are electric; however, this is expected to change by 2025.
Meanwhile, electric passenger vehicles have shown the largest growth in adoption since 2015.
By 2022, the electric car market experienced exponential growth, with sales exceeding 10 million cars. The market is expected to continue its strong growth throughout 2023 and beyond, ultimately reaching a projected 886,700 barrels of oil per day in 2025.
From gas to electricity
As the world transitions from fossil fuels to electricity, BloombergNEF predicts that declining oil demand does not necessarily equate to falling oil prices.
In the event that investments in new supply capacity decline faster than demand, oil prices could still remain volatile and high.
The shift to electrification, however, will likely have other implications.
While most of us associate electric vehicles with lower emissions, it’s good to remember that they’re only as sustainable as the electricity used to charge them. The shift to electrification therefore presents an incredible opportunity to meet the growing demand for electricity with clean energy sources such as wind, solar and nuclear.
Moving away from fossil fuels in road transport will also require expanded infrastructure. Electric vehicle charging stations, expanded transmission capacity and battery storage will likely be key to supporting the large-scale transition from gas to electricity.
