RMI – X-change Cars, Sept 2023

According to a report by RMI, the rapid growth of electric vehicles (EVs) has led to a peak in global oil demand for cars, which is expected to decline significantly by 2030. EV sales have been growing exponentially, with countries like Northern Europe and China leading the way due to supportive policies. It typically takes around six years for EVs to capture 10% market share, and another six years to reach 80% market share in leading countries. The main driver behind this transition to EVs is economics, as battery costs continue to decrease, resulting in price parity with internal combustion engine (ICE) vehicles in major car markets by the end of the decade. This will enable the EV revolution to expand into the Global South and other transportation sectors. The competition to dominate the future of transportation technologies has further accelerated the transition, with companies already investing in battery and car factories to meet the growing demand for EVs. However, there are challenges that need to be addressed, such as upgrading electricity infrastructure, expanding charging networks, and finding solutions for battery recycling. The report predicts that if the challenges are successfully tackled and sales continue to grow on the current trajectory, EVs will comprise 62% to 86% of car sales by 2030, with China leading with a market share of at least 90%. In contrast, demand for new ICE vehicles peaked in 2017 and has been declining by 5% annually since then. Furthermore, global oil demand for cars reached its peak in 2019 and is expected to decline rapidly, with a decrease of over 1 million barrels per day (mbpd) each year by 2030. The growth of EVs is also driving change in the wider transport sector, putting half of global oil demand at risk. Despite the positive trends, the report emphasizes the need for further action to limit warming to 1.5°C and achieve a net-zero emissions target by 2050. The detrimental effects of fossil fuel air pollution, the economic cost of importing fossil fuels, and the potential threats of climate change underscore the urgency for faster progress in transitioning to sustainable transportation alternatives.