Eye d’ era

eft. A Tesla Model S, top, and Chevrolet Volt, above. of when, rather than if. Bloomberg New Energy Finance, a research group, estimates electric vehicles will become cost competitive with the ICE on an unsubsidized basis as early as 2025.

Even under such a scenario, however, some argue that rising populations in places such as Nigeria, India and Indonesia could counter any gains in EV adoption in the Western world.

Moreover, a plateau in oil demand around 2025-2030 would hardly eliminate the market for oil.

“That still leaves us with a staggering 100-million-barrel-per-day consumption at that time,” Tertzakian said.

In the near term, EV adoption will be gradual. Globally, there are about one billion small-to-mid-size vehicles on the road today, with about 80 million new vehicles sold every year. Even if every new car sold today were electric, it would take more than a decade to displace the entire global fleet.

“I’m very cautious about saying more rapid adoption can’t happen, because we don’t know what the technologies are going to look like in 2025 or 2030,” Tertzakian said. “But the near-term trajectories do not really support a rapid substitution over the course of the next decade.”

Longer-term projections become much less certain — and could shift much more rapidly.

The International Energy Agency predicts that 54 per cent of new vehicles sales will be electric by 2040, and EVs will make up 33 per cent of the global fleet.

If major centres for electric vehicle sales such as China begin buying EVs en masse, the world could see a more radical shift in the demand for oil, effectively eliminating a massive portion of the oil market in a matter of years.

The quicker adoption of electric vehicles essentially depends on two factors: battery technology and public policy. Developing the ideal battery for an electric car is a tenuous balance between cost, safety and energy density, said Linda Nazar, a professor at the University of Waterloo in Ontario who is among the country’s leading researchers of battery technology.

Researchers have for years been altering the physical components of batteries in order to maximize their capabilities, creating different combinations of nickel, manganese, cobalt, aluminum and other metals to find more efficient flows of ions between a positive and negative electrode (the basic process by which batteries operate).

But finding the right mix is a painstakingly slow process. A cheaper battery might be less efficient, while a safer and more stable battery might have lower energy efficiency.

“Generally, you have to make compromises,” Nazar said.

But realizing that next step change in efficiency, some believe, is the crucial link in the mass adoption of electric vehicles.

The other main factor policy change.

The U.K., France and some small European countries have already pledged to ban petrol and dieselbased cars over the next few decades. Many others, from China to Canada, have pledged to put regulations or incentives in place to boost EV sales.

However, critics say many such proclamations are not accompanied by hard policy changes. And in the absence of incentives, sales appear to dry up: Tesla sales plummeted when Hong Kong authorities scrapped a tax break on EVs in February 2017. The removal of the incentive nearly doubled the retail cost of a Tesla Model S.

But if voters continue to favour tighter environmental policy to wean the economy off oil, EV sales are bound to surge if consumer incentives are offered and charging networks are expanded.

That would bring about a radically different world than the one oil producers have enjoyed for more than 100 years, and will put a hard cap on an industry that has spent most of its time growing.

In the meantime, oil producers are likely to continue incrementally cutting costs and reducing their carbon footprint, grudgingly preparing for a peak demand scenario, but hoping oil’s century-long reign will hold course. will be