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How EV Adoption Will Impact Oil Consumption (2015-2025P)

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How EV Adoption Will Impact Oil Consumption (2015-2025P)

The EV Impact on Oil Consumption

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As the world moves towards the electrification of the transportation sector, demand for oil will be replaced by demand for electricity.

To highlight the EV impact on oil consumption, the above infographic shows how much oil has been and will be saved every day between 2015 and 2025 by various types of electric vehicles, according to BloombergNEF.

How Much Oil Do Electric Vehicles Save?

A standard combustion engine passenger vehicle in the U.S. uses about 10 barrels of oil equivalent (BOE) per year. A motorcycle uses 1, a Class 8 truck about 244, and a bus uses more than 276 BOEs per year.

When these vehicles become electrified, the oil their combustion engine counterparts would have used is no longer needed, displacing oil demand with electricity.

Since 2015, two and three-wheeled vehicles, such as mopeds, scooters, and motorcycles, have accounted for most of the oil saved from EVs on a global scale. With a wide adoption in Asia specifically, these vehicles displaced the demand for almost 675,000 barrels of oil per day in 2015. By 2021, this number had quickly grown to 1 million barrels per day.

Let’s take a look at the daily displacement of oil demand by EV segment.

Number of barrels saved per day, 2015Number of barrels saved per day, 2025P
Electric Passenger Vehicles8,600 886,700
Electric Commercial Vehicles0145,000
Electric Buses 43,100333,800
Electric Two & Three-Wheelers674,3001,100,000
Total Oil Barrels Per Day726,0002,465,500

Today, while work is being done in the commercial vehicle segment, very few large trucks on the road are electric—however, this is expected to change by 2025.

Meanwile, electric passenger vehicles have shown the biggest growth in adoption since 2015.

In 2022, the electric car market experienced exponential growth, with sales exceeding 10 million cars. The market is expected to continue its strong growth throughout 2023 and beyond, eventually coming to save a predicted 886,700 barrels of oil per day in 2025.

From Gas to Electric

While the world shifts from fossil fuels to electricity, BloombergNEF predicts that the decline in oil demand does not necessarily equate to a drop in oil prices.

In the event that investments in new supply capacity decrease more rapidly than demand, oil prices could still remain unstable and high.

The shift toward electrification, however, will likely have other implications.

While most of us associate electric vehicles with lower emissions, it’s good to consider that they are only as sustainable as the electricity used to charge them. The shift toward electrification, then, presents an incredible opportunity to meet the growing demand for electricity with clean energy sources, such as wind, solar and nuclear power.

The shift away from fossil fuels in road transport will also require expanded infrastructure. EV charging stations, expanded transmission capacity, and battery storage will likely all be key to supporting the wide-scale transition from gas to electricity.

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Energy

Visualized: A Decade of Clean Energy Investment

In this graphic, Visual Capitalist has partnered with EnergyX to explore the growth of global clean energy investment.

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Teaser image showing a bar graph that hints at global investment in energy by its source.

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The following content is sponsored by EnergyX

Visualized: A Decade of Clean Energy Investment

Global energy investment is growing every year. But recently, investments in clean energy have been significantly outpacing investments in fossil fuels.

For this graphic, we partnered with EnergyX to explore how global energy investment has changed and learn how investments in clean energy are starting to pay off for their investors.

The Rise of Sustainable Energy Investment

Propelled by various climate initiatives such as the Paris Agreement and the widespread adoption of EVs, global investment in sustainable energy surged to over $1.7 trillion in 2023, the highest ever, and the IEA projects that this growth could continue:

Energy Product20202021202220232030F
Clean Electrification$0.97T$1.05$1.21T$1.34T$1.65T
Low-Emission Fuels$0.01T$0.01$0.01T$0.02T$0.05T
Energy Efficiency$0.28T$0.35$0.39T$0.38T$0.49T
Clean Energy Total$1.26T$1.41T$1.61T$1.74T$2.19T
Natural Gas$0.26T$0.27T$0.31T$0.32T$0.35T
Oil$0.42T$0.48T$0.52T$0.55T$0.60T
Coal$0.16T$0.16T$0.18T$0.18T$0.11T
Fossil Fuel Total$0.84T$0.91T$1.01T$1.05T$1.06T
Total Energy Investment$2.10T$2.32T$2.62T$2.79T$3.25T
promotional graphic with a button and wheel that promotes the EnergyX investment site

Between 2020 and 2030, global investment in sustainable energy could increase by 74% to nearly $2.2 trillion, compared to just 26% additional investment in fossil fuels, with a forecast total of $1.06 trillion. This shows that sustainability is the future of energy investment. 

Sustainable Investor Success Stories

While the growing investments in clean energy show that the world embraces sustainability, energy investors will still look for decent returns. Now, in 2024, clean energy investments are beginning to bear fruit. Here are just a few examples:     

  • Between 2019 and 2023, Tesla had a cumulative return of 1,073% 
  • NextEra Energy’s quarterly dividend increased by over 10% as of February 2024
  • Investors in EnergyX have 10x’ed their investments since the company’s first offering in 2021

Lithium plays a critical role in powering electric vehicles (EVs) and facilitating the transition to sustainable energy. EnergyX has patented technology that enhances lithium extraction rates by up to 300%, contributing to meeting the growing demand for lithium and fueling the EVs of the future.

promotional graphic that promotes the EnergyX investment site

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