OPEC Increases EV Market Predictions, Joins Oil Companies in Future Outlook
Recently, OPEC researchers reinforced their analysis of the nascent industry. The organization increased its predictions by a whopping five times – from 46 million EVs on roadways.
There's no doubt the EV market is growing. A handful of research firms have released aggressive predictions about the electrification of the transportation industry. The latest forecast comes from Bloomberg New Energy Finance, suggesting EVs will be cheaper to buy in the US and Europe by 2025 (compared to fuel-powered cars).
The Organization of Petroleum Exporting Countries (OPEC), is also extremely bullish about the emerging EV sector. Recently, OPEC researchers reinforced their analysis of the nascent industry. The organization increased its predictions by a whopping five times – from 46 million EVs on roadways by 2040 to 266 million EVs over the same period.
"The number of EVs on the road will have major implications for automakers, oil companies, electric utilities and others," explained Colin McKerracher, head of advanced-transport analysis at BNEF in London, in a note to clients. "There is significant disagreement on how fast adoption will be, and views are changing quickly."
OPEC Predictions and Analysis
The main driver of OPEC's renewed expectations of the EV industry is decreasing battery costs. At the moment, predictions surrounding cost of power cells that were made in 2012 for 2030 have already come to fruition. Because of this, researchers had to realign their analysis to take the market's rapid pace into consideration.
By 2040, OPEC officials expect EVs to make up 12 percent of private cars worldwide. Other research firms, including Bloomberg New Energy Finance, have made more assertive predictions, at 33 percent of the world's fleet by 2040.
Private oil companies are also taking a similar stance on the EV sector. Oil businesses, such as BP and Exxon, are of the view that global EV adoption will reach 100 million by 2030 or 2035. If true, demand for oil could crash by eight million barrels per day. While this would negatively impact the oil industry, it would not take down the entire sector.
Wood Mackenzie's, a high-caliber energy, chemicals, renewables, metals and mining research and consultancy firm, view of the EV market matches the predictions of private petroleum manufacturers. The group foresees the release of the Tesla Model 3 to severely impact demand for oil by roughly 300,000 barrels. Its heaviest prediction involves new car sales, suggesting that EVs will reduce demand for gas-powered cars to 15 percent by 2035.
Musk Weighs In
Elon Musk, CEO of Tesla, provided his own insights about EV adoption during the 2017 National Governor's Association meeting in Rhode Island. The prolific entrepreneur made several bold predictions about the growing market:
"Probably in 10 years, more than a half of new vehicle production is electric in the United States. Half of all production will be EV, I think almost all cars produced will be autonomous," said Musk, during the 2017 National Governor's Association meeting.
Additionally, the Tesla CEO expects self-driving cars to dominate human-powered vehicles on public roads by 2037. By this period, Musk also believes fully autonomous, SAE-L5 cars will be the norm. To showcase its latest advancements in driverless technology, the automaker is planning a self-driving road trip from California to New York later this year – without human intervention.