Contributed by Robert Lyman © 20018
Robert Lyman is an Ottawa energy policy consultant. He was formerly a public servant for 27 years and a diplomat for 10 years prior to that.
Electric vehicle (EV) sales continue to grow at a healthy pace from a low starting point and have carved out a niche, especially in markets where governments can afford the large subsidies that underpin sales. Proponents of EVs as a way to reduce oil consumption and the related greenhouse gas emissions claim that there will be 20 million EVs on the world’s roads by 2020. The pace of future sales growth, however, remains uncertain. Continuation, or even acceleration, of current trends seems unlikely to increase the size of the total EV stock anywhere close to the 20 million figure globally by 2020. EVs will remain a small part of the total vehicle stock, and seem likely to have little impact on the growth of oil demand or global carbon emissions for several years to come.
It has become commonplace for certain environmental groups, governments and the media that follow climate change issues to claim that sales of all-electric vehicles (EVs) will soon largely displace sales of gasoline and diesel fueled cars, thus significantly reducing oil consumption and greenhouse gas emissions. Last year, the International Energy Agency published a report entitled Energy Technology Perspectives (ETP) 2017 setting out a scenario in which rising EV use would reduce greenhouse gas emissions at a rate consistent with the United Nations COP21 goals. It projected that the global electric light duty vehicle (i.e. cars and passenger SUVs) stock would increase 28 times from 2017’s two-million-vehicle level to 56 million vehicles by 2030. This is actually a reduction from the previous ETP report, which projected that EVs would constitute 150 million (10%) of the light duty vehicle stock by 2030 and nearly 1 billion (40%) of the stock by 2050.
In an October, 2016 Friends of Science blog item , I proposed a scorecard by which one might measure whether plug-in electric vehicles are on track to meet the lofty expectations of their proponents. I suggested that if, by 2020, the global inventory of EVs is three million or less, this would demonstrate conclusively that the technology is facing serious market barriers that may limit its role in reducing GHG emissions for decades. Continuation of the rate of sales growth experienced through mid-2016 plus some acceleration could yield a global stock of 7.4 to 13 million EVs by 2020. A 2020 EV population of 20 million would align with the more optimistic claims of sources like the ETP.
What Has Happened?
To find out what has happened since then, I used the best online sources of data available concerning plug-in electric light-duty vehicle sales. These include InsideEVs, which provides data on monthly and annual sales for the United States and the world, the International Association of Motor Vehicle Manufacturers (OICA) for national and global sales of all light duty vehicles, and Statista, a commercial statistics portal that provides data on commercial and consumer trends.
The following table shows the most recent EV sales.
Sales of Electric Plug-In Light Duty Vehicles
|2018 (to date)||153,666||749,729|
The figure for U.S. sales in 2018 is based on data for the first seven months of the year, while the figure for worldwide sales in 2018 is based on data during the first six months of the year. Global sales are a surprising 65% higher than those of the comparable period of 2017 and are on track for an annual total of over 2 million vehicles. The much higher rate of growth globally than in the U.S. is largely due to the heavy subsidization of EV sales in China and, to a lesser extent, Europe.
The figures show the continuing growth in EV sales that underlies the optimism expressed by many EV advocates. Sales could be over five times higher in 2018 that they were in 2014.
The EV industry sees the remarkable annual rate of growth globally as a norm likely to continue indefinitely. Projecting this forward to 2030, some EV advocates conclude that by then plug-ins will constitute eight out of ten new car sales. This assumes, of course, that governments will continue the very high levels of subsidies that now drive sales in most countries, and that there will be no shortages of materials related to battery components that would limit production.
What Does This Mean for the Vehicle Fleet?
It helps to place the EV growth in context. First, let us examine electric vehicles sales as a proportion of all light duty, or personal, vehicle sales, as shown in Table 2.
Sales of All Light Duty Vehicles (million)
As you will note, light duty vehicle sales in the United States have declined for the past four years, while global sales have increased. In 2018, there were almost 71 million light duty vehicle sales globally.
The following graph, also from OICA, shows how global personal vehicle sales have increased since 2005.
Table 3 compares EV sales to total personal vehicle sales globally and in the U.S.
Plug-In EV Sales as a Share of Total Sales (%)
So EVs are increasing their percentage share of light duty vehicle sales, but worldwide 98 out of every 100 cars sold is still fueled by oil products.
The picture is even more striking if one views it in terms of the total vehicle stock (i.e. all the light duty vehicles now on the roads). There are no authoritative estimates of this, but a 2014 study by Navigant Research estimated the total to be almost 1.2 billion then, and more recent vehicle industry reports project that this total will reach 1.3 billion by 2020. OICA’s published figures only go to 2015, and indicate a stock of 947 million personal vehicles then.
Inside EV’s estimates of the total plug-in stock of vehicles is shown in Table 4.
Global Stock of EVs 2014 – 2017
If we assume that the total personal vehicle stock is now at least one billion vehicles, then EVs constitute three one-thousandths of the present stock.
At present rates of growth, a total EV stock in the range of 7.4 to 13 million EVs in the world by 2020 is not impossible, but the high-end of the range looks like a considerable stretch. If EVs attained that milestone, they would constitute 1.3% of the total personal vehicle fleet.
Light Duty Vehicles and World Oil Demand
According to the BP Statistical Review of World Energy, the world’s consumers used 98.2 million barrels of crude oil in 2017. While the number varies depending upon the characteristic of the crude oil, on average somewhere between 50% and 55% of a barrel is used to produce gasoline and diesel fuel for light duty vehicles and trucks. Road vehicles are more than 97% dependent on oil for motive power.
Road fuel demand is driven by many factors, including notably the total number of vehicles, the fuel efficiency of the vehicles, the market penetration of alternative fuel vehicles, general economic trends and the price of fuels. There are important regional differences, with gasoline demand recently falling slightly in OECD countries due to increasingly stringent fuel efficiency regulations affecting new vehicles, some changes in travel patterns (e.g. more young people living in urban centres and going without a car), while demand is rising in developing countries supported by a growing middle class.
The projections published by major energy forecasting authorities seem more and more influenced by their perception of the role that governments will play in seeking to “manage” demand. European-based forecasters such as the International Energy Agency, BP and Statoil (now renamed: “Equinor”) take it as given that governments will go beyond regulating fuel efficiency and subsidizing EVs to banning sales of oil-fueled cars by some future date, as already has been announced by some European countries. Others, including the North American-based forecasters, are less convinced that the public will support such restrictions and point to increasing motorization rates.
The motorization rate measures the number of registered vehicles (personal and commercial) per 1000 inhabitants of a country. For many decades there has been a large gap between the relatively high motorization rates in the more advanced industrialized countries and in the poorer ones. The United States, for example, had a motorization rate of 821 in 2015, compared to 646 in Canada and 581 in the European Union countries. In contrast, Russia had a motorization rate of 281, South America 176, China 118, Indonesia 87, and India 22.
Motorization rates are rising everywhere, but the most significant increases are occurring in the less developed countries. From 2005 to 2015, motorization rates increased by 60 % in Russia, Turkey and other formerly less developed European countries; by 60% in Central and South America; and by 141% in Asia, the Middle East and Oceania. It even increased 35% in Africa. Hundreds of millions of people, wanting the benefits of enhanced mobility, are likely to purchase vehicles in the next few decades and they will seek the most economic options available. Stratas Advisors, a well-respected U.S. consulting firm that analyses refined oil product markets, “does not see demand at serious risk in the medium term given the large as-yet-untapped markets in Africa, Asia and parts of Latin America and the infrastructure still necessary for widespread adoption of electric vehicles”.
The reality is that global oil demand is growing at its fastest rate in history. Over the past decade of 2009 to 2018, global crude oil demand has risen from 84.3 million barrels per day to 99.3 million barrels per day, an average of 1.5 million barrels per day per year. It appears that the world’s consumers are not listening to the pundits and forecasters who foresee a decline.
In summary, EV sales continue to grow at a healthy pace from a low starting point and have carved out a niche, especially in markets where governments can afford the large subsidies that underpin sales. The pace of future sales growth remains uncertain. Continuation, or even acceleration, of current trends, however, seems unlikely to increase the size of the total EV stock to the 13 million figure globally by 2020. While impressive, this will remain a small part of the total vehicle stock, and seems likely to have little impact on the growth of oil demand, or global carbon emissions, for some years to come.
Related: A Tale Told By the Numbers, Dec. 2016