The share of electric vehicles in the global vehicle parc could rise to 30-35% by 2035 and 80% by 2050 according to BP forecasts based on assumptions of falling costs and governments continuing to tighten regulations of automobile emissions.
In its annual energy outlook, the British energy giant predicts that most EVs will be sold in China, Europe and the United States through 2035.
Released on Monday, this year’s outlook considered three possible scenarios for how the world’s energy use will evolve: that global reduction of greenhouse gas emissions will accelerate; that the world will achieve a zero net increase in those emissions; and that climate control efforts will gain new momentum.
The first two scenarios explore how different elements of the energy system may change to achieve a substantial reduction in carbon emissions. The new momentum scenario assumes a slower pace of emissions reductions based on progress made in recent years.
Under the accelerated and net zero scenarios, the number of electric cars and light-duty trucks – including plug-in hybrids and models powered solely by battery – increases from around 20 million in 2021 to 550 million to 700 million by 2035, and to around 2 billion such vehicles by 2050. Electric passenger vehicles comprise the majority of new car sales by the mid-2030s under those more aggressive scenarios, supported by tighter regulation of vehicle emissions, improving cost and choice competitiveness of electric cars, and growing preference and acceptability among consumers.
Under the new momentum scenario, electrification of cars and light duty trucks is less rapid, but still projected at around 500 million such vehicles by 2035 and 1.4 billion by 2050. Electric passenger cars would account for around 40% of new car sales in 2035 and 70% in 2050.
The outlook suggests electrification of road vehicles is initially dominated by China, Europe and North America, which together account for around 60-75% of the growth in electric vehicles to 2035 in the three scenarios and 50-60% of the growth to 2050.
The outlook projects that global oil demand plateaus during the next 10 years or so, before declining over the rest of the outlook period, driven in part by the falling use of oil in road transport as vehicles become efficient and are increasingly fueled by alternative energy sources.
Global oil consumption keeps playing a major role in the global energy system through the first half of the outlook under accelerated and net zero scenarios, with the world consuming 70 million to 80 million barrels per day in 2035. The decline accelerates in the outlook’s second half, with oil demand in 2050 falling to around 40 million b/d in the accelerated scenario and 20 million b/d in net zero. In the new momentum scenario, oil consumption remains stronger, staying close to 100 million b/d for much of this decade, before declining gradually to around 75 million b/d.
Throughout the outlook period, lower demand for oil in road transport accounts for more than half of the reduction in total oil demand in the accelerated scenario. In 2030 this would mainly reflect the impact of the global vehicle fleet’s increasing efficiency, which is more than twice that of the switch to alternative energy sources. By 2040, those two effects are projected to be broadly equal. By 2050, the switch to alternative energy sources, led by the increasing electrification of vehicles, accounts for more than twice the impact on oil demand than the effects from greater efficiency, in the accelerated scenario.
The company updated the scenarios in this year’s outlook to take account of two major developments over the past year – the Russia-Ukraine war and the passing of the Inflation Reduction Act in the United States.
BP Chief Economist Spencer Dale said in the outlook’s introduction that preliminary analysis suggests the disruptions to Russian energy supplies and the resulting global energy shortages seem likely to have a material and lasting impact on the global energy system. He noted that the desire of countries to bolster their energy security by reducing their dependency on imported energy that is dominated by fossil fuels, and instead have access to more domestically produced energy – much of which is likely to come from renewables and other non-fossil energy sources – suggest that the war is likely to accelerate the pace of the energy transition.
“The scale of the economic and social disruptions over the past year associated with the loss of just a fraction of the world’s fossil fuels has also highlighted the need for the transition away from hydrocarbons to be orderly, such that the demand for hydrocarbons falls in line with available supplies, avoiding future periods of energy shortages and higher prices,” Dale said.