Aug. 10 (UPI) -- An increased consumer use of electric vehicles means global oil demand could shrink by at least 6 million barrels, a report from Wood Mackenzie found.
In what was described as a carbon-constrained scenario, the new report, prepared in coordination with GTM Research, which covers the global electricity sector, said electric vehicles could make up about 20 percent of all of the cars on the road in less than 20 years.
"The falling cost of EVs and their batteries will put EV purchase prices on par with internal combustion engine cars, boosting consumer demand," Paul McConnell, research director of global trends for Wood Mackenzie, said in an emailed statement.
Swedish automaker Volvo said this year it was marking an end to a vehicle line powered solely by the internal combustion engine. Tesla said in its second quarter release that orders for two of its electric vehicle lines were up 15 percent in July when compared with the quarterly average.
Two million electric vehicles were on the road globally last year, with most of those in the U.S., European and Chinese markets. For Europe, the British and French governments set long-term goals to phase out new gasoline- and diesel-powered vehicles. Germany, meanwhile, has worked quickly to expand its network of charging stations across its national roadway system.
Wood Mackenzie described the maturation of the electric vehicle market as "rapid," adding it expected momentum to start eating away at the global demand for oil.
"We foresee EVs potentially displacing about 6.5 million barrels of oil demand, offsetting growth from other sectors such as petrochemicals," McConnell said.
Economists at the Organization of Petroleum Exporting Countries revised their forecast for global oil demand for 2018 higher by 1.28 million barrels per day to 97.7 million barrels per day. Total oil demand for 2017 is expected to be 96.49 million barrels per day. Most of the demand growth next year comes from developing countries.
Using the pace of transition from horse-drawn carriages to fuel-powered vehicles in the 20th century as a benchmark to measure growth, the International Monetary Fund said motor vehicles could vanish from markets in advanced economies within the next 20 years. For the shift in vehicles themselves, the IMF said retooling may be necessary for the industry.
"The falling cost of EVs and their batteries will put EV purchase prices on par with internal combustion engine cars, boosting consumer demand," McConnell said. "This is going to force automakers to develop even better EVs or far more efficient internal combustion engines, as per-mile running costs become a key differentiator between the new technology and legacy engine types."