China’s switch to electric vehicles will ‘end oil era’
The world’s reliance on oil is coming to an end as emerging markets such as China replace petrol and diesel motors with electric vehicles (EVs), analysis by Carbon Tracker suggests.
The financial think tank’s study found that transport in emerging markets accounts for more than 80% of all expected growth in oil demand up to 2030. However, the massive deployment of EVs in developing economies, led by China, is forecast to cut expected growth in global demand by 70%.
Annual savings would be more than US$80bn in China and US$35bn in India, according to the study – more than enough to pay for infrastructure needed to support electrified transport. Moreover, battery prices have fallen by 20% since 2010, and are expected to fall to below US$100/KWh during the next few years, which will make EVs as cheap as conventional vehicles. When combined with the war on plastic, the researchers said it is likely that global oil demand reached its peak last year.
“Emerging market importers will bring the oil era to an end,” explained Kingsmill Bond, energy strategist at Carbon Tracker. “This is a simple choice between growing dependency on what has been expensive oil produced by a foreign cartel, or domestic electricity produced by renewable sources whose prices fall over time.”