Chart: Electric vehicle growth is slowly eating into global oil demand

By the end of this decade, global demand for oil will peak — and that’s largely thanks to the rise of electric vehicles and clean energy technologies, according to the International Energy Agency’s ​“Oil 2024” report.

In advanced economies, demand for oil has been decreasing for decades, but it’s still rising in China and India. As a result, IEA forecasts that demand for the planet-warming fossil fuel will grow, albeit slowly, until 2030.

The plateau is expected to happen for two reasons, per the IEA: increasing global adoption of electric vehicles and the implementation of higher efficiency standards for gas cars.

Spurred by rapid uptake in China, EV sales could reach around 17 million this year — accounting for one in five cars sold globally, according to the IEA’s ​“Global Electric Vehicle Outlook 2024.” But by 2030 that picture is set to change dramatically; EVs could make up half of all car sales worldwide. While EV market growth in the U.S. has been shaky, hybrid sales are booming — and the report predicts that net-zero emissions targets, policy incentives, and falling EV prices will help sales pick up in the coming years.

Stricter emissions regulations on gas cars will bring oil demand down further. The European Union’s strengthened standards require emissions for new cars to be 50 percent lower in 2030 than they were in 2021. In the U.S., strengthened efficiency rules for cars are projected to halve emissions from light-duty vehicles within the next decade, due to higher uptake of both EVs and hybrid vehicles.

Though growth in oil demand may soon disappear, that doesn’t mean oil use will drop off. According to the IEA’s estimates, the world will still be using too much oil to be on track for climate targets by 2030 — even though EVs are expected to displace millions of barrels of oil per day by then.

To reach the Paris Agreement net-zero emissions goals, oil and gas use will need to decline by more than 75 percent by 2050. In other words, oil demand will need to not only plateau but fall significantly.