Are electric cars the future? BP Magazine looks at some energy variables.
Imagine a time when electric cars could outsell gasoline cars by ten to one. It may seem unlikely, but that era has been and gone. This was actually a reality in the United States at the turn of the 20th century, when 600 electric taxis roamed the streets of New York and an electric car held the land speed record.
Overall, global oil demand is projected to grow by around 20 Mb/d over the next 20 years, driven by increasing prosperity in fast-growing Asian economies. In short, electric vehicles will have an impact on oil demand over the next 20 years, but not a game-changing one.
In its ‘450 scenario’, the International Energy Agency (IEA) sets out a pathway for the entire energy system consistent with limiting carbon dioxide emissions, such that there is a better than evens chance of global mean temperatures increasing by less than two degrees Celsius by 2100. In this forecast, the IEA assumes 450 million electric vehicles on the roads by 2035, some 380 million vehicles more than we envisage in our Outlook. This is at the very top end of the range of external forecasts I have seen, consistent with significant changes in technology or policy.
In this scenario, growth in oil demand would be almost 5Mb/d lower relative to the case in which electric vehicles didn’t grow at all. This will dampen oil demand to some extent, but it won’t stop it from increasing overall. We have to keep in mind that 80% of oil demand comes from other parts of the transport sector and from industry which are likely to continue to expand.
And, of course, there is the question of the fuels used to produce the electricity used to charge the batteries of the electric vehicle. In some parts of the world where the power sector is heavily reliant on coal, reductions in overall carbon emissions may be minimal – or worse: it is tantamount to switching from an oil-fueled car to a coal-powered one.
Are Electric Cars Really Green?
Latest posts by Dick Young (see all)
- Here’s the Minimum You Should Invest in Fixed-Income - December 14, 2018
- Are You Prepared for the New Money Crisis? - December 14, 2018
- How Can You Spot a Loser in Investing? - December 12, 2018