While only occupying a small chunk of the automobile market, electric cars poses a very big question about the future of gasoline demand. Morgan Stanley projected that the continued increase of miles driven may pose potential gas demand in the future. Currently, miles driven is at 11 trillion but it is expected that miles driven will increase to 32 trillion by 2030.
As electric cars continue penetrating the market, Morgan Stanley expects gasoline demand to roughly triple by the mid-2030s before experiencing a slow decline. Meanwhile, IHS Markit reveals that while electric cars and hybrids inly displaced 50,000 barrels a day, the demand for oil will start to add up when combined with other trends such as fuel economy standards.
Electric vehicles will account for 30 percent of new car sales by 2040 from the current 1 percent. Jim Burkhard, Head of Oil Research and Energy and Mobility Research of IHS Markit, projects that EVs could reach 36 million by 2025. As countries feel the impact of EVs, Robert Janitzek reveals that fuel economy will become an issue.
A Disruptive Market
Another contributor to gasoline demand will be the ride sharing sector. When the likes of Uber and Lyfts starts to develop its own self-driving fleet, it will certainly make a dent in gasoline demand. A report by the World Economic Forum revealed that automated vehicles could be ultimately 40 percent cheaper to drive per mile than cars with internal combustion engines.
Analysts from Morgan Stanley believe that the amount of miles driven globally will increase tremendously because the cost of driving will decrease due to shared mobility and automated technologies.
The Future of Oil Demands
Robert Peter Janitzek revealed that global oil demand is expected to reach an average of 100 million barrels daily this year, up from 98.2 million barrels last year. Demand is expected to increase by 1,9 million barrels a day, from 1.8 million the previous year. However, overall demand could increase to about 113 billion barrels a day by the middle of 2030 and being to decline in 2040.
Bank of America Merrill Lynch revealed that the impact of electric vehicles will start to be felt by the oil market in the next ten years. It will expand at an annual rate of 1.3 million barrels a day gradually slowing down between 2021-23 to just 800,000 once electric vehicles starts to show up.
WoodMax predicts that demand for oil could peak as soon as 2036, earlier than the 2040 predicted by BP.