Electric vehicle sales may make a visible dent in oil demand by 2027, according to a new BofA Global Research report, which was sent to Rigzone this week.
In the report, BofA Global Research highlighted that, in previous publications, the company argued that global transportation fuel demand would peak when electric vehicles as a share of total vehicles sold reached 20 percent. BofA Global Research revealed in its latest report that it estimated current electric vehicle sales penetration is now at 14 percent.
“Interestingly, gasoline demand in the U.S. is already starting to decouple from miles driven, according to the latest data, even as electric vehicles only make up seven percent of total cars sold in North America,” BofA Global Research noted in the report.
“Rising electric vehicle sales will eventually level off gasoline and total transportation fuel demand over the medium term. Yet, the path is unlikely to be linear. While electric vehicle sales will keep biting into future oil demand for years to come, the speed of the transition will depend on the availability of scarce raw materials such as lithium, cobalt or copper,” the company added in the report.
“The spike in lithium prices this past year boosted the costs of car manufacturers and squeezed profitability, factors that could eventually slow down the transition to a gasoline-free future,” BofA Global Research went on to state in the report.
In a separate report published last week, Rystad Energy said electric vehicle adoption is approaching the levels needed to offset the annual global growth of the size of the active car fleet. In a report released back in October 2022, Rystad Energy outlined that a “large jump” in electric vehicle demand over the past three years had brought the “growing importance of charging stations in key countries” into focus.
In that report, Rystad Energy highlighted that its research showed that, at the time, public charging infrastructure was not a limiting factor to the fast adoption of electric vehicles, “especially in nascent markets”.
“In countries such as Germany, France, and Netherlands, there is no direct correlation between the growth of charging infrastructure and the number of electric vehicles sold,” Rystad Energy stated in the report.
“Of far more significance to consumers are issues such as high fuel prices for combustion engines or high sticker prices for electric vehicles,” Rystad Energy added.
To contact the author, email andreas.exarheas@rigzone.com
What do you think? We’d love to hear from you, join the conversation on the Rigzone Energy Network.
The Rigzone Energy Network is a new social experience created for you and all energy professionals to Speak Up about our industry, share knowledge, connect with peers and industry insiders and engage in a professional community that will empower your career in energy.