The global adoption of battery electric vehicles (BEVs) is having a notable effect on oil demand across several key markets. Oil has been the primary source of energy for the transport industry for over a century, and a large portion of the world’s infrastructure grew around the extraction, refining, and distribution of oil and petroleum products. Although this reliance on oil has significantly contributed to premature atmospheric heating and accelerated climate change, fossil fuels were integral to the transport sector and several other energy-intensive industries.
As automobiles became common and urban centers across the globe increasingly centered their infrastructure around vehicles, the demand for fossil fuels continued to skyrocket. However, concerns regarding the role of fossil fuels like oil, natural gas, and coal in climate change have caused dozens of countries worldwide to begin transitioning to cleaner and more sustainable alternatives. Green infrastructure like EVs, solar panels, and wind turbines has gained major traction amidst the transition to renewable energy.
The International Energy Agency’s (IEA) Global EV Outlook 2025 now predicts that vehicles will replace over 5 million barrels of oil per day by 2030 thanks to an increased number of electric cars in the transportation sector. This worldwide fleet of electric cars hit nearly 58 million units in December 2024, growing by three times from 2021, and now accounts for around 4 percent of the global fleet of passenger vehicles.
China, currently the largest electric vehicle market on the globe, will account for 50 percent of the global EV fleet by the end of the decade. One in ten cars in the Chinese auto market is an electric car, followed by Europe with a one in twenty ratio. EV adoption in the Chinese market has been spurred by the availability of affordable electric vehicle models and low charging costs, while Europe has markets like Norway, Sweden, and Iceland with notably high EV penetration.
Eighty-eight percent of all the new cars sold in Norway in 2024 were electric, allowing the country to cut its demand for oil by 12 percent from 2021 to 2024. EV sales in the UK jumped by 30 percent last year while Denmark saw the share of EVs in new vehicle sales jump to 56 percent, at close to 100,000 units.
This surge in EV adoption across the world caused global demand for oil to plummet by more than 1.3 million barrels per day last year, the IEA notes. Light-duty vehicles (LDVs), typically small vans and passenger cars, are responsible for 80 percent of the oil demand displaced by electric cars, but experts predict this share will fall to 77 percent by 2030 as electric buses and trucks gain popularity.
The global adoption of EVs is steadily reducing the world’s dependence on oil by cutting demand in the transportation sector, one of the largest consumers of petroleum. Over time, widespread EV adoption could significantly curb global oil consumption, reducing emissions and fostering a more sustainable energy future.
As more companies like SolarBank Corp. (NASDAQ: SUUN) (Cboe CA: SUNN) (FSE: GY2) continue to make inroads into the energy storage and EV battery market segments, we are likely to see further reductions in the amount of oil used around the world as more people charge their EVs using renewable energy.
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