Key Points
- Electric vehicles (EVs) have displaced 5 times more oil globally than they did 5 years ago, with 1.2 million barrels of oil displaced per day.
- The current rate of EV adoption puts them on track to displace 5.8 million barrels of oil a day by 2034.
- Transitioning to EVs is crucial in reducing oil dependency, as road transport burns close to half of all the world's oil.
Why Electric Vehicles Are Displacing Oil at an Increasing Rate
Electric vehicles (EVs) have become a crucial component in reducing oil dependency globally. Despite making up only 4.2% of the global car fleet, EVs now account for 25% of all new car sales worldwide.
The current rate of EV adoption has led to a significant increase in oil displacement, with 1.2 million barrels of oil displaced per day. This is a fivefold increase from 2021, when EVs displaced 215,000 barrels of oil per day.
As the global car and truck fleet continues to grow, EVs are the only thing stopping runaway oil demand, warns Transport & Environment (T&E). In fact, the current rate of EV adoption puts them on track to displace 5.8 million barrels of oil a day by 2034.
At a Glance
| Global Oil Displacement | 1.2 million barrels per day Current rate of oil displacement by EVs |
| Projected Oil Displacement by 2034 | 5.8 million barrels per day Projected rate of oil displacement by EVs by 2034 |
| Global EV Sales | 25% of all new car sales worldwide Current rate of EV sales as a percentage of all new car sales worldwide |
| Global EV Fleet | 4.2% of the global car fleet Current rate of EVs as a percentage of the global car fleet |
The Impact of Electric Vehicles on Oil Demand and the Energy Transition
The Impact of Electric Vehicles on Oil Demand and the Energy Transition
Transitioning to EVs is crucial in reducing oil dependency, as road transport burns close to half of all the world's oil. The current rate of EV adoption has led to a significant increase in oil displacement, with 1.2 million barrels of oil displaced per day.
As the global car and truck fleet continues to grow, EVs are the only thing stopping runaway oil demand, warns T&E. In fact, the current rate of EV adoption puts them on track to displace 5.8 million barrels of oil a day by 2034.
Right now, the only winners in our oil addiction are fossil fuel giants and petrostates. Places with near 100% sales of EVs like Norway, Denmark, and Hong Kong have effectively insulated themselves from future shocks.
What This Means for the Future of Transportation and Energy Security
What This Means for the Future of Transportation and Energy Security
Accelerating EV adoption will be crucial to preventing future oil shocks, according to T&E. In fact, the current rate of EV adoption puts them on track to displace 5.8 million barrels of oil a day by 2034.
World leaders must set binding electrification targets at this year's COP to ensure a smooth transition to EVs. This will not only reduce oil dependency but also provide essential grid flexibility and storage.
Displaced oil is estimated from daily per vehicle savings: about 0.019 barrels per car (derived from Ember), 0.2 per truck (IEA), and 0.15 per bus (bottom-up from typical fuel use and mileage).
Risk & Opportunity Assessment
| Commercial Risk | Low | The transition to EVs is driven by government policies and consumer demand, reducing the risk of commercial disruption. |
| Competitive Risk | Medium | The increasing adoption of EVs may lead to a shift in market share among automakers, but this risk is mitigated by the growing demand for EVs. |
| Regulatory Risk | High | The lack of binding electrification targets at COP31 may hinder the transition to EVs, increasing the risk of regulatory disruption. |
| Reputation Risk | Low | The increasing adoption of EVs is driven by consumer demand and government policies, reducing the risk of reputation damage for automakers. |
| Technology Disruption | Low | The transition to EVs is driven by existing technology, reducing the risk of technological disruption. |
| Commercial Opportunity | High | The increasing adoption of EVs presents a significant commercial opportunity for automakers and suppliers, driven by growing demand and government policies. |
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