Posted on October 18, 2017 by Matt Pressman
Could electric cars, like Tesla, pose an imminent threat to the oil industry? According to CNBC, "Adoption of electric vehicles and improved fuel efficiency could wipe out 3.5 million barrels a day of demand from cars by 2025, Barclays commodities analysts projected in a research note... That is roughly equivalent to the total production of OPEC's third-largest producer, Iran, which pumps about 3.8 million barrels a day."
Above: Electric cars could soon impact oil demand (Image: Tesla Owner)
And it's not just Iran that could feel the effects. "If electric vehicles make up one-third of the car market by 2040, it could knock out 9 million barrels a day of demand, or about 90 percent of Saudi Arabia's daily output." It's conceivable that dependence on foreign oil has adverse geopolitical repercussions. That said, the rise of electric cars may ultimately have a positive long-term impact — it could defund terrorism, decrease wars, and increase national security.
Above: Tesla's presence is growing in Dubai (Image: Motoring Middle East)
Although oil-rich countries might feel pressured from deceasing demand, some in the Middle East are actively pursing electric cars and clean energy alternatives. Elon Musk and Tesla have been openly embraced in the UAE. Dubai's government recently signed a deal for 200 Tesla Model S and Model X vehicles and 50 were just delivered. And that's not all. Uber just announced that they'll deploy a fleet of 50 new Tesla vehicles under its UberONE service in Dubai.
Above: Dubai's government just added 50 Teslas to its fleet (Image: Gulf Business)
Change is coming. Ironically, oil-rich Norway is a world leader in electric cars with legislation to end gas-powered vehicle sales by 2025. All around the world, countries are looking to phase out fossil fuel powered cars and transition to electric vehicles. "Oil consumption could take a major hit in the coming years as a growing number of countries take steps to yank the internal combustion engine from their streets, Barclays analysts forecast."
Above: Dubai's vision for the future of electric, autonomous vehicles stars a Tesla Model S (Youtube: Dubai Future Foundation)
Which countries are looking to support electric cars in lieu of gas and diesel powered vehicles? It turns out, "some of the world's top automotive markets have recently proposed banning or curbing the use of vehicles that burn fossil fuels, Barclays notes. They [also] include developed European nations like France, Germany and the U.K., as well as top growth markets China and India. California is also considering a ban." In addition, some high-profile cities around the world also have aggressive plans in place to ban fossil fuel powered vehicles.