EVs Could Cut Global Gasoline Use By 2040

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A tipping point has been reached in the last two years for electric cars. Almost half of all fully or partially electric vehicles sold in the past decade were sold in 2014. In addition to the standard-bearing Tesla, every car manufacturer in the world has fully or partially electric cars in their lineups. The most exciting cars in the world are now electric.

But what does this mean for global gasoline consumption over the coming decades? To explore this idea, I created two scenarios, a moderate speed penetration of EVs and a more aggressive penetration.

The good news is that electric vehicles will reduce gasoline consumption even if no other levers are used related to personal transportation. The bad news is that it will be 15 to 20 years before gasoline consumption growth flattens and 25 to 35 years until consumption returns to 2014 levels and lower if electric cars are the only lever that is pulled.

1. Tesla is targeting 500,000 car sales annually by 2020.
2. Tesla is creating an ecosystem for long-range electric vehicles with Superchargers being open to other manufacturers, and patents being made available freely.
3. Tesla is not the only company making electric vehicles — it’s just making the best electric-only vehicles by a long shot. There are about 38 fully electric and plug-in hybrid electric cars sold from the bottom end of the market to the top in 2015. (Electric Cars 2015 — Prices, Efficiency, Range, Pics, More)
4. Currently, the fastest two production cars to 60 mph in the world are plug-in hybrids: the 2015 Porsche 918 Spyder and the 2015 Ferrari LaFerrari at 2.2 and 2.4 seconds, respectively. The fastest production sedan ever is the Tesla Model S P90D with Ludicrous Mode at 2.8 seconds, and it’s the 13th fastest production car of any type ever in the 0–60, with the term “production car” being a bit generous to several of those models. (List of fastest production cars by acceleration)
5. Near the bottom end of the market, the Nissan Leaf is already cheaper to buy than the relatively equivalent Nissan Juke, and is much cheaper over 5 years of ownership. (Mike Barnard’s answer to “Why don’t people use electric cars more?” on Quora.)
6. Plug-in electric cars — battery only and plug-in hybrid (but not hybrids that can’t be plugged in) — sold 58% more units in the USA alone in 2014 than in 2013. (100% Electric Car Sales Up 58% In US In 2014) There has been softening of demand in 2015 coinciding with decreased oil prices (which may or may not have a significant affect) and the approaching release of 2nd-generation versions of the country’s two most popular electric options — the Nissan LEAF and Chevy Volt.
7. 90% of owners of partially or fully electric cars won’t consider a gas-only car. (Electric Car Drivers Tell Ford: We’ll Never Go Back To Gasoline)
8. There are now 11,000 high-speed charging stations globally between Superchargers and CHADeMO networks, and the numbers are increasing rapidly. (Tesla Supercharger Network Growth Surges Over Last 14 Months, CHAdeMO Association) Most people don’t use charging stations, but just plug in at home overnight, so this vastly underrepresents the actual infrastructure for charging.
9. Every car manufacturer in the world has plug-in hybrids or hybrids in their lineup, typically many of them at multiple price points. Even companies which publicly state their dislike for electric vehicles — Fiat, Toyota — both produce and sell fully electric cars, plug-in hybrids, and conventional hybrid vehicles.

All of these factors tell us the following: electric vehicles of various types are here to stay.

1. They have better performance characteristics.
2. They are cheaper to operate.
3. They are cheaper to maintain.
4. They are becoming much more convenient, and for most owners are much more convenient than gas cars because they are always full in the mornings.

Tesla is a standard bearer, but it doesn’t even have the best-selling electric car. It is currently the best marketing for the Nissan Leaf that exists, though, helping drive sales of that affordable alternative. It is driving the rest of the car manufacturers to pay attention to fully electric vehicles, to respond to its exuberant performance, and to strategically position themselves to deliver more and more electrified vehicles.

When you multiply that all out, the 500,000 cars Tesla will sell are going to have a force multiplier on the rest of the automotive industry. It’s likely that when Tesla is selling 500,000 cars, other manufacturers will be selling five to ten million cars with electric drive trains, in whole or in part. And that five years after that, the numbers will have increased again substantially.

When the Tesla Model 3 comes out in 2017, it will be at a price point before any rebates of $35,000, be all-wheel drive, be faster to 60 than any small sports sedan, corner like its on rails due to its low centre of gravity, and be cheaper to own and operate than economy cars from other vendors. It will be amazing. But it’s still a $35,000 car, not a $12,000 car. And there will be no second-hand cheap ones for a few years for people with more aspirations than dollars.

It will be a game-changer, and other manufacturers are already responding to it, especially Chevy with its planned Bolt.

The story is increasing electrification of all automobiles, not just Tesla.

But Car Ownership Is Increasing Fast And Cars Last A Long Time

What does this mean for impacts on gasoline consumption? Well, let’s look at some numbers.

• For the past ten years, new car sales have been expanding at an average of 4% per year. Let’s make an assumption that this will continue for the coming decades. (International car sales 1990-2015 | Forecast.)
• This implies that there will be roughly 90 million cars produced and sold annually in 2020, 110 million in 2025, and 133 million in 2030.
• Cars last roughly 13.5 years before being scrapped (UK average). That means that in 2020, effectively all of the cars built in each of the years from 2007 to 2020 will still be on the road.
• That means that in 2020, there will be roughly 1.035 billion cars in operation, in 2025 there will be 1.265 billion, and in 2030 about 1.541 billion. And in 2050, there would be 3.77 billion cars if this continues. Car companies love this math.
• This is likely incorrect, as global population growth is flattening and expected to peak in 2050 at 9–10 billion, and this is counteracted by expectations of significantly increased affluence globally. It’s very difficult to predict, but this at least gives a basis for this analysis.

So let’s make some more assumptions in two scenarios, a moderate growth of EV scenario and a fast growth scenario.

• The moderate scenario has 5% of total new vehicles in 2020 having at least partially electric drivetrains, 10% in 2025, and 25% in 2030. Under the faster scenario, the percentages of new vehicles which were fully or partially electric would be 10%, 25%, and 50% in the same periods.
• Under the first scenario, in 2020, a total of 2% of all cars in the world would be partially electric, 5% would be in 2025, and 12% would be in 2030. Under the second scenario, the numbers would be 4%, 11%, and 25%.
• The ratio of partially to fully electric cars will reverse from 2020 to 2030 given battery improvements and the like, from 25% fully electric in 2020 to 75% fully electric in 2030 (and likely close to 100% in perhaps 2045). Electric cars completely eliminate petroleum, but hybrids of various types don’t.
• The average internal combustion passenger vehicle has a consumption of 8.9 litres per 100 km (2008 US average per Wikipedia). Let’s also assume that fully electric vehicles are 0 litres per 100 km (reasonable) and that hybrids are 2.1 litres per 100 km (BMW i8 rating, for fun).
• So the last two assumptions work out in the following way. In 2020, the average vehicle with electric components will have a litres per 100 km of 1.58 litres per 100 km, in 2025 it will be 1.05 litres per 100 km, and in 2030 it will be 0.53 litres per 100 km.
• Cars will be driven 20,000 km per car per year, the North American average. That’s high globally, but it gives a baseline.
• This also assumes global grid improvements even in developing nations, something which is underway today. A reasonably good grid is necessary for widespread use of electric vehicles and shifting off of gasoline.
• Finally, autonomous vehicles will not impact personal car ownership or diminish driving per vehicle, which is very arguable.

These assumptions have some interesting implications.

• In 2014, there are in the range of 804 million cars on the road globally. They are consuming roughly 1.4 trillion litres of gasoline annually.
• In the moderate scenario, in 2020, cars will consume 27% more litres of gasoline in total annually than in 2015; in 2025, 51%; in 2030, 71%. They will consume less gasoline than if electrification was not underway to the tune of 2%, 4%, and 11% respectively.
• In the fast electrification scenario, in 2020, cars will consume 25% more litres of gasoline in total annually than in 2015; in 2025, 42%; in 2030, 46%. They will consume less gasoline than if electrification was not under way to the tune of 3%, 10%, and 24% respectively.
• It will take to until 2035 in the moderate scenario for global gasoline demand to peak, and by 2050 (assuming even greater penetration of electrics) demand will still be higher than in 2014.
• Under the fast scenario, demand would peak around 2029 and it won’t be until 2040 when demand starts decreasing from 2014 levels.

What Can We Conclude From This?

So oil companies will be impacted, certainly. Demand for their product will not be skyrocketing quite as much. Electric cars under the aggressive scenario will cut a lot of new demand, but since the total number of cars is growing so fast, fossil fuel companies will still see a lot of demand growth for the next decade or two. But it’s pretty easy to see that declining demand due to personal transportation shifting to electric is coming.

This model slightly overstates the percentages of reduction due to the way in which I calculated efficiency of the total electric vehicle fleet on the roads, but is close enough to be illustrative.

1. The number of cars is increasing so fast and cars last so long that it’s going to take decades to slow and reverse fossil fuel consumption via electrification alone.
2. Buying a hybrid car is better than buying a pure gas car, but still locks in 13.5 years of increased fuel consumption.
3. The more pure electric cars purchased sooner, the greater the benefits will be in terms of reduced pollution and carbon emissions. A decision to buy an electric car today eliminates 13.5 years of gasoline consumption into the future.
4. Fossil fuel companies are not shaking in their boots over this in the short term. But Saudi Arabia has opened the taps because they see that fossil fuels are going to have a diminishing market in the coming decades and they want to get profit from each barrel that they pump while they can. Saudi Arabia’s plan (at least before the recent massive power shakeup there) is to be a clean electricity regional exporter by 2050 as a major part of its economy.
5. Transportation only represents in the range of 13% of global greenhouse gas emissions. Getting transportation close to 0% is necessary, but insufficient by itself.
6. A lot of effort is required in addition to electrification of cars to reduce pollution and carbon emissions from transportation. Urban densification, electric autonomous carsharing, substantial transit improvements, bike shares, and other mechanisms to reduce car demand per capita are critical. If global demand keeps steady, we would see close to 3.4 billion cars by 2050, when the world population is expected to peak at 9–10 billion people. That’s an untenable number of personal passenger vehicles. Thankfully, there are signs that in developed countries, teenagers and young adults have less of an intense and burning fixation on cars, preferring to have smartphones to connect. Fingers crossed that this is a global pattern.

Electric vehicles are here to stay, they are going to grow very quickly, and they are a lot better than the gasoline and diesel vehicles they are replacing. While electrification of personal transportation is a must in the fight to reduce human-induced climate change, it isn’t a silver bullet. Having driven a Tesla in Insane Mode, I can safely say that it is a very fun bullet, though. This is an adaptation that will increase the amount of fun in the world while simultaneously being virtuous.