Insights to the Electric Mobility market
As battery costs decline, performance increases and charging infrastructure improves, electric mobility will eventually outcompete its internal combustion engine counterparts. This goes across all forms of transportation: cars, buses, trucks, mopeds, aircraft, ships and construction machinery. One may think such a shift is still far into the future, but this revolution has actually started. Adoption of electric buses has already passed 50%. Sales of electric two-wheelers in India are booming. Global electric vehicle (EV) adoption has only passed 3%, but is already displacing oil demand growth and an estimated 1% of global demand in 2025.
The backdrop is that the passenger vehicle segment is the largest consumer of oil, representing almost one-third of global demand. It is also the sector that is poised to have an imminent impact from electrification as EVs are about to become superior to traditional cars on convenience, emissions, range and price – even without subsidies. Adding to the situation is the advent of autonomous vehicles, which will enable car sharing for the masses at much lower costs than car ownership. Car sharing fleet owners may prefer EVs due to lower fuel and maintenance costs, which again may accelerate EV adoption. Furthermore, due to higher annual mileage per car, fleet owners will need to replace their cars much more frequently than car owners, which implies a faster fleet renewal to electric.
The combination of autonomous and electric vehicles may eradicate a large part of oil demand much sooner than you think.