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Kimberly and Scott Sheffield
The transportation sector is responsible for more than half of global oil demand, with passenger vehicles and trucks making up by far the largest fraction. Many countries with decarbonization goals therefore seek to expand electrification of road transport to meaningfully decrease reliance on this fossil fuel. The degree to which electric vehicle (EV) penetration can alter global oil demand has implications for whether more stringent government decarbonization policies will be needed to reach net zero targets.
This report, part of an oil and gas research initiative at Columbia University’s Center on Global Energy Policy, compiles medium- and long-term forecasts of EV penetration and addresses the question of whether the sharp increase in EV sales in recent years—a fourfold rise from 2019 to 2021—is projected to continue or even accelerate. It compares survey responses from 14 entities, including governments, think tanks, oil companies, consultants, and investment banks in the fourth quarter of 2021 with a similar survey conducted in 2019. The report examines forecasts for passenger EV sales and fleet share as well as those for electric commercial trucks out to 2050, and considers some of the key underlying drivers of passenger vehicle oil demand (e.g., population growth, GDP growth, battery cost trends). Some forecasters offered multiple scenarios, including business as usual (BAU), carbon constrained, and net zero carbon emissions (NZ) by 2050, with meaningfully different results.
Overall, survey respondents anticipate an acceleration in the rate of EV penetration in passenger vehicles and light-duty trucks in the medium and long term, both in terms of sales and the ensuing share of the total fleet. Other findings from the forecasts include the following:
The Biden Administration's new foreign entity of concern rule on critical minerals excludes Chinese sources, posing challenges for the U.S. energy transition.
The remarkable pace of road transportation electrification—a success story of the clean energy transition—has rapidly become one of the lead drivers of demand for critical minerals (CM) such...