Anticipated end of Oil Age and the role of Electric Vehicles

The combustion of fossil fuels such as gasoline and diesel emits carbon dioxide, a greenhouse gas, into the atmosphere. Carbon dioxide (CO2) and other greenhouse gases such as methane (CH4), nitrous oxide (N2O), and hydrofluorocarbons (HFCs) are causing the Earth's atmosphere to warm up, resulting in climate changes that we are now seeing. Amid such a scenario, National Energy Conservation Day serves as a stark reminder of the critical need to shift towards sustainable energy options. And against this backdrop, the rise of electric vehicles (EVs) stands out as a beacon of hope, combining technological prowess with environmental stewardship.

Experts and policymakers have for some time agreed on the approaching twilight of the era of oil domination. This comes as a result of an increase in the adoption of EVs that have the power to change the transportation sector. In this article, we delve into the recent data driving the anticipated end of the oil age and the pivotal role electric vehicles play in this transformative journey.

The Paris-based International Energy Agency (IEA), a grouping of 29 industrialised nations, projects a paradigm shift in global oil consumption, with a peak expected by the end of this decade at 103 million barrels per day, after making regular adjustments from its 2017 forecast of a nearly 105 million bpd peak in 2040. The shift is attributed to the remarkable growth in electric vehicle sales, leading to adjustments in oil consumption forecasts. The IEA anticipates that EVs will erase around 5 million barrels per day of world oil demand by 2030. International Energy Agency (IEA), a grouping of 29 industrialised nations, expects world oil consumption to hit its zenith at the end of this decade.

The Unseen Impact: Avoidance of 1.8 Million Barrels of Oil Daily

The increasing popularity of electric and fuel-cell vehicles also represents one of the most profound drivers of change that the world is expected to witness, demand for oil in road transport is to reach nearly 42.3 million barrels a day by 2023. But if we just switch to electric vehicles, the picture may change and we can avoid a huge chunk of the oil consumption. As per BloombergNEF’s recent findings, electric and fuel-cell cars would lead to about 1.8 million barrels of avoided oil every day in 2023; equating to more than 4% of road transport sector’s oil consumption, compared to last year. This marks a considerable growth compared to 2022 and a rapid rise as opposed to 2015 where the prevented crude oil consumption amounted to about 720,000 barrels daily.

Two-Wheelers Leading the Charge

Surprisingly, the unsung heroes in the war against oil consumption are not the fancy electric cars or huge commercial vehicles but the nimble two- and three-wheeled electric vehicles. These account for about 60% of the oil demand avoided in 2023, driven by their rapid adoption, especially in regions like China, Southeast Asia, and India. This is a clear indication of how crucial electric mobility is towards changing people’s perspective in the global transportation sector. Notably, passenger EVs surpassed buses in 2022 to become the second-largest source of avoided oil demand. In 2023, passenger EVs are estimated to represent 23% of total avoided oil demand, while buses and commercial vehicles should represent 13% and 3%, respectively.

CO2 Emission Reduction: A Global Impact

Apart from the substantial reduction in oil consumption, electric vehicles contribute to a tangible cut out in CO2 emissions. Naturally, less oil burned would mean less CO2 emissions. BloombergNEF estimates that electric vehicles currently avoid 112 million metric tons of CO2 emissions every year. This is a net reduction, considering the emissions from additional electricity generation. Despite being just a fraction (2%) of all emissions from road transport in 2023, this figure highlights the positive trajectory toward a cleaner, greener and more sustainable future of the world.

The anticipated end of the oil age is a reality shaped by the convergence of declining oil reserves, rapid growth of the electric vehicle market, advancements in battery technology, integration of renewable energy, and expansion of charging infrastructure. The technical foundations of this transformation emphasise the significance of continuing innovation and collaboration across industries to secure a sustainable and efficient transportation future. As electric vehicles become more common, the globe is entering a new era that offers a cleaner, greener, and more technologically advanced transportation landscape.

Hari Kiran is the Co-Founder and COO at eBikeGo. Views expressed are those of the author.