EV revolution threatening long-term oil demand growth
Published : Saturday, 21 November, 2020 at 9:58 PM Count : 125
The growth in electric vehicle adoption, especially in emerging markets, could threaten long-term oil demand growth, Carbon Tracker has reported, citing these markets’ dependency on imports that could be relieved by a switch to electric vehicles.
"Emerging oil importers in the emerging market spend 2% of GDP on oil imports, have high and growing dependence on imported oil, and 285,000 people die prematurely each year due to pollution caused by transportation," the report's authors wrote.
They further argued that emerging economies were having to import increasingly expensive oil and were increasing their reliance on foreign products. At the moment, this argument is rather weak, oil prices in the 40s and China, the world's largest oil importer, have emerged as the only country capable of driving demand for crude. At the same time, this growth is likely to continue thanks to China, the world’s largest EV market, and Beijing’s set ambitious emission targets.
Meanwhile, Carbon Tracker says battery prices are falling, and EVs are becoming increasingly competitive with internal combustion engine cars.
This argument is also questionable: if the IVS were to compete with ICE cars, we would see a faster switch from the ICE car to the EV in the world's largest market, such as Europe and again China. Still, cheap EVs have their limitations: it's no accident that Tesla has been talking about particularly strong sales in China.