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Barclays Predicts That EVs Will Significantly Reduce Oil Demand by 2025

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Electric Car charging parking spot

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EV technology is booming and with that boom, conversations about weaning drivers off oil have been permeating the industry. The latest headline hails from Barclays analysts.

They forecast that by 2025, improved efficiency, as well as widespread adoption of EVs, will curb oil demand by about 3.8 million barrels per day. This amount is approximately equal to Iran’s daily oil production rate of 3.8 million barrels a day.

This news comes on the heels of several vehicle markets setting deadlines for banning diesel fuel. China, India, Germany, France, and the U.K. have all been taking gradual strides to accomplish this goal. In the U.S., California is currently debating the prohibition of diesel to help speed up the assimilation of EV technology.

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OPEC predicts that this year’s global oil demand rate will total 96.8 million barrels per day. If the pro-EV trend increases, electric vehicles could make up one-third of the international car market by 2040. This surge in EV models could trigger a severe blow to oil demand; it could reduce the daily oil demand rate by 9 million barrels a day, an amount that’s approximately 90% of Saudi Arabia’s daily oil production.

According to stats from EV Volumes, a global sales database for electric vehicles, there were 649,000 global plug-in vehicles sold during 2017 up until August. This is 46% higher than the same period during 2016, further backing Barclays’ prediction that this technology will continue to increase at a healthy rate.

We anticipate more details as the industry takes tangible steps in the next couple of decades toward making EVs a global trend that could signal the abandonment of fossil fuel in light of greener alternatives.

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News Sources: CNBC, EV Volumes