The global oil demand is expected to drop by approximately five million barrels per day in the coming years due to the significant rise in sales of electric cars worldwide.

According to the International Energy Council’s Global EV Outlook, plug-in hybrids are predicted to make up 20 percent of total global car sales this year. Of the 26 million rechargeable cars on the roads, 70 percent are fully electric.

As the electrification of vehicles continues to rise, oil demand will decrease by five million barrels per day by 2030. To put this into perspective, the global oil production in 2021 was 89 million barrels daily.

The Global EV Outlook is a yearly report about electric mobility worldwide, supported by the Electric Vehicles Initiative (EVI). It analyzes historical trends and predictions up to 2030 on electric vehicles, charging infrastructure, battery demand, electricity consumption, oil replacement, greenhouse gas emissions and related policies.

The report examines past events and incorporates forecasts for the year 2030. It also provides an analysis of the experiences of prominent markets to advise policymakers and other interested parties about the policies and market structures that can be implemented to promote the adoption of electric vehicles.

Effect of electric cars on global oil demand

Electric cars’ popularity, encompassing fully electric and plug-in hybrid models, has increased worldwide. In 2020, 10 million electric cars were sold globally — likely to rise by 35 percent (14 million units) this year.

This growth is attributed to the availability of smaller electric cars in the American and European markets, which is expected to drive down the prices of electric cars and narrow the gap with fossil-fueled vehicles.

IEA technical director Timar Guell said there is an expectation that prices for small and medium-sized electric cars will become comparable.

“Our current expectation is that we can see similar prices for small and medium-sized electric cars in North America and in the European markets somewhere in the mid-2020s,” he said.

Other countries’ governments have made plans to support the stakeholders in the electric vehicle market. Some of their policies also provide support for battery production and supply chains.

For example, the EU’s Net Zero Industry Act wants most of the batteries used in Europe to be made by local manufacturers. Similarly, the U.S. Inflation Reduction Act also aims to improve domestic supply chains for electric vehicles, batteries and minerals.

Since the Inflation Reduction Act passed in August last year, major electric vehicle and battery companies have announced their plans to invest over $52 billion in supply chains in North America between August 2022 and March 2023.

China dominates market

While electric vehicle sales and manufacturing are mostly happening in a few major markets, there are encouraging indications of growth in other regions.

The IEA predicts that electric three-wheeled vehicles will dominate the market in India and other less industrialized countries in the coming years. Half of all registered three-wheeled vehicles in India last year were electric.

The country’s government has implemented an incentive program worth $3.2 billion to encourage battery manufacturing and the adoption of electric vehicles. This program has been successful in attracting investments totaling $8.3 billion.

Looking at the government support and robust investment, IEA forecasts that there will be a significant increase in the production of batteries and the rollout of electric vehicles in India in the coming years.

The report also indicates that electric car sales have increased in other parts of South Asia, such as Thailand, where they accounted for three percent of total car sales last year.

The electrification of two- or three-wheeled vehicles is crucial for sustainable development in numerous developing countries, as they provide an affordable means of accessing mobility.

China remains the dominant player in the global market for electric cars, accounting for 60 percent of worldwide sales of electric vehicles in the past year.

The country is also responsible for 35 percent of all-electric car exports worldwide and maintains its battery and component manufacturing dominance.


The Volvo Group is a Swedish multinational manufacturing corporation headquartered in Gothenburg. While its core activity is the production, distribution and sale of trucks, (wikipedia)

Volvo Cars

Volvo Cars is a Swedish multinational manufacturer of luxury vehicles headquartered in Torslanda, Gothenburg. The company manufactures SUVs, station wagons, and sedans. (wikipedia)