Electric vehicles are more dependable, convenient, cost-effective to operate, safe, and enjoyable to drive than conventional vehicles. Even though electric vehicles are becoming more popular. The most important reason for their introduction is to reduce the use of polluting petroleum products. The use of gasoline is expected to decline as the number of electric vehicles (EVs) grows. Despite the fact that it is still very early in the game, there is a significant Volume of gasoline displacement due to EVs.
Some governments and media pay considerable attention to the passenger vehicle industry, even though it only accounts for about a quarter of global oil demand. Most of this can be attributed to the idea that a rapid switch from conventional oil-powered cars to electric vehicles (EVs) is both possible and necessary in order to reduce greenhouse gas emissions and improve air quality in cities. Numerous studies have been published on the impact of electric vehicles on oil demand.
Volume of gasoline displacement due to EVs: An Overview
Plug-in vehicles accounted for a total of 323 million gallons of gasoline displaced in the US in 2018, according to a report from the Office of Energy Efficiency and Renewable Energy. That’s just a tiny fraction of the total amount of gasoline consumed in the United States in that year: 0.25 %. The increasing popularity of trucks and SUVs has more than wiped out all the emissions reductions from EVs.
However, demand for gas is continuing to decline. More than 42 percent more gas was displaced in 2018 than in 2017. And nearly twice as much as in 2016. In addition, the percentage of vehicles that are entirely electric is rising. Even though pure electric vehicles and plug-in hybrid vehicles produced equal amounts of gasoline in 2012 and 2013, EVs accounted for more than two-thirds of the total in 2018.
Electricity use is on the rise as gas use declines. There has been a dramatic increase in US plug-in vehicle energy consumption since 2016. From 1.44 terawatt-hours (TWh) in 2016 to 2.85 TWh in 2018, according to a new report from the Department of Energy. In 2018, pure EVs accounted for 61% of the electricity consumption from plug-in vehicles. While plug-in hybrids accounted for 39% of the electricity consumption from these vehicles.
Recent statistics and future predictions
This is what IHS Markit’s “Inflections” base case says would happen. If we exclude the COVID pandemic scenario: The US oil and gas demand would be lower than it is now. Most of the way. In 2019, there were 20.3 million barrels of oil per day. In 2050, there might be 15.3 million b/d. After hitting a high point in 2036, global oil demand is expected to decline. There are a lot of people who say that government policies and EV incentive programs. They have a big impact on the outcome of oil and gas projects. It shows that there is a lot of uncertainty about how quickly electric cars will become popular.
Volume of gasoline displacement due to EVs
According to some reports, there were no passenger vehicle forecasts that predicted big changes in oil demand over the next 25 years. After a peak, demand in many cases stayed the same.
According to some estimates, the demand for this type of business will drop significantly. Almost by the year 2040 under two-degree carbon scenarios. Even though this may be true in some cases. Demand will not fall until 2020, and there will be little to no drop until 2030. The fact that there are fewer and more expensive alternatives to oil in the petrochemical, aviation, or freight transport sectors could make it hard for people to drive less.
The rate at which demand rises is very important. If the world doesn’t use a lot of oil quickly, policymakers need to understand that they need to invest in new oil sources. In order to avoid shortages and the price spikes that come with them. In addition, the review found that forecasters had very different ideas about what was causing demand.
What are the factors that affect this displacement?
It’s expected that population growth will be much slower on the two-degree carbon trajectory. And electric car sales and use are expected to be much higher than in the other predictions. However, it’s possible that these carbon scenarios show what we need to do to keep the temperature rise to two degrees. When you think about what is likely to happen, you don’t think about what forecasters say. In other forecasts, EV use was much lower than the average. As a way to show that changes in the passenger vehicle industry will be gradual and slow, rather than disruptive.
Source: CGEP Survey & Analysis
If electric cars are not widely used, demographic changes and economic growth will continue to slow down oil demand growth over the long term, even if EVs are not widely used. In developing countries, rising income and urbanization are two forces that work against each other. In two-degree carbon projections, lower population growth is a common assumption. This means that oil demand in the transportation sector will also go down. A two-degree carbon scenario doesn’t have any clear effect on the growth of the economy, though. It’s possible to make a lot of different assumptions about how the economy will grow. Which can either make or break the decline in oil demand.
There are two big unknowns when it comes to passenger vehicle oil demand: changes in technology and government policies that encourage the use of electric cars (EVs). A battery pack could cost $100 per kWh by the middle of the 2020s.
It is also possible to reduce oil demand more quickly through government policies such as incentives or mandates for electric vehicles or other alternatives. The effects of automation and the growth of mobile services on oil demand, on the other hand, are less clear. Autonomous vehicle fleets that can be summoned on demand could lower transportation costs and make it more convenient, resulting in increased demand for travel and energy. However, autonomous vehicle fleets may be powered by electricity due to the lower operating costs of EVs compared to conventional vehicles and the possibility that city governments may mandate the use of electricity for environmental reasons. More research is needed to determine how autonomous vehicles and new mobility models will affect oil demand.