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Electric Vehicles to Disrupt Oil Market Faster Than Anticipated, Experts Explain

Feb 16, 2017 09:22 AM EST
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Norway is again pushing for a greener society -- this time, they are planning to sell cars that have zero or low-emission starting 2025, phasing out petrol and diesel cars.
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Experts say the rate of electronic vehicles' growth will have huge implications on the oil, electric, utility markets and the industry as a whole. It may be maddeningly difficult to predict what will happen years from now, but analysts reveal that electric vehicles are poised to have a "very" rapid growth in the future. 

Domination of Renewable Sources

According to Vox, transportation was a major contributor to the overall carbon emissions of the U.S. Previous data in 2014 showed that it's tailing behind electricity's carbon emission at 26 percent and 30 percent, respectively. However, the outlet notes that in 2016, the two are neck in neck. 

Recent studies reveal that natural gas, renewable energy and other efficient sources of energy have been dominating industry projections compared to the power sector, which has a higher carbon intensity. Based on these projections, experts say that in the future, electric vehicles that use renewable energy will be the preferred mode of transportation. It's also a realistic solution in reducing the carbon emissions from the transportation section.

Could Electronic Vehicles Be Off by a Long Shot?

Dan Cohan of The Hill explained, however, that EV forecasts may off by a long shot. The EIA's Annual Energy Outlook for 2017 appears to be a bit exaggerated, as its forecast is "nearly double" from last year. 

According to Cohan, how can hybrids and plug-ins be already ready to dominate the industry when they have just entered the foray of consumer interests. Not to mention, the current administration under Donald Trump may have other plans for electric vehicles.

Still, studies like those from the Grantham Institute - Imperial College London and the Carbon Tracker Initiative both agree that electronic vehicles, along with solar photovoltaics, will soon overtake the oil industry. The two could even work hand-in-hand in halting growth in the global demand for oil as early as 2020.

The EIA predicts that by 2025, electronic vehicles' share of the U.S. market will be at 8 percent (it's still at 1 percent today). Another big influential forecast, BP's 2017 Energy Outlook, sees electronic vehicles having 6 percent of the global market share by 2035.

If the forecasts play out, fossil fuels could lose 10 percent of its overall market share to solar photovoltaics and electronic vehicles within a decade. Small as it may seem, a 10 percent loss could be more than enough to send U.S. coal companies spiraling as well as disrupt utility industries.

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