Can electric cars make a huge dent in Oil Consumption? And if, so, how fast?

Car manufacturers go all in on electric cars, raising specter of peak oil demand

Oil companies have long viewed electric cars as a frightening, if distant threat to the gasoline and diesel sales that account for 70 percent of U.S. demand for crude. But suddenly, that threat is speeding towards Houston's most important industry at rates far faster than once expected.

 From article, (Oil companies are well aware of the threat from electric cars. The European majors Royal Dutch Shell and BP are predicting that oil demand will peak by 2040 if not earlier, while the world's biggest oil companies are shifting investments to petrochemical operations, and alternative energy sources such as wind and solar, and natural gas, the cleaner-burning fossil fuel of choice for generating electricity.

Electric cars, have a long way to go before they make a significant dent in gasoline demand. They still account for just a tiny share of auto sales -- about 1 percent of the 17 million vehicles sold in the United States last year, and their range of about 150 miles, such as on the Nissan Leaf, means electric cars simply won't make sense for people who don't live in urban areas or like to get away on the weekends.

But if car companies carry through on their promises, battery technology will improve rapidly in the decade ahead, extending ranges and speeding up charge times. IHS, which advises many of the world's largest oil companies, estimates that at the current pace of growth, electric vehicles will make up 38 percent of new car sales worldwide by 2040. Under that scenario, oil demand would peak in the late 2030's at 113 million barrels per day, compared to about 100 million barrels today.

But should automated car technology advance quickly as the Tesla and the ride-hailing service Uber envision, that would multiply the adoption rate of electric vehicles. Oil demand would peak within the next decade and fall to 90 million barrels per day by 2040.

If ride-hailing companies could buy automated electric cars instead of paying drivers, they could offer their services more cheaply, which would attract more and more customers, said Broadbent, the IHS analyst. And since its cheaper for fleet operators to run electric cars, the market for gasoline-powered cars would shrink.)

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