Electric Buses are Eating into Oil Demand

[Marina Schwarz + 1,576]

China is adding e-buses at a breakneck speed, apparently, and Bloomberg estimates these will eliminate almost 280,000 bpd from diesel fuel demand this year. Maybe more this year?

[Adil + 1]

What predictions about oil price today 

[BlackTortoise + 103]

The numbers are staggering. China had about 99 percent of the 385,000 electric buses on the roads worldwide in 2017, accounting for 17 percent of the country’s entire fleet. Every five weeks, Chinese cities add 9,500 of the zero-emissions transporters—the equivalent of London’s entire working fleet, according Bloomberg New Energy Finance.

[JHM + 30]

The shocking thing here is that deisel displacement from EVs is about 5 times that of gasoline. Many analysts have only been counting private passenger EVs, not commercial EVs, and so have missed the biggest threat that EVs pose to fuel demand. 

The Bloomberg displacement numbers at for light EVs and buses. Other medium and heavy duty vehicles are still largely ignored. So if we start with displacement of about 300kb/d in 2018 and allow that to grow by 50%, we reach cumulative 3.4mb/d in 2024 and 5.1mb/d in 2025. The difference of 1.7mb/d will likely overwhelm any other growth in oil demand in that year. Thus, we may see oil demand enter structural decline as early as 2025. 

The point here is that it is critical not to undercount commercial EV. Looking only at impact of small EVs on gasoline demand, we'd only have an impact around 0.2mb/d in 2025, which would not be enough to arrest demand growth. But a 1.7mb/d impact is a very different story, and most of that story will be driven by falling demand for deisel.

This is a black swan in plain sight. 

[BlackTortoise + 103]

20 hours ago, JHM said:

The shocking thing here is that deisel displacement from EVs is about 5 times that of gasoline. Many analysts have only been counting private passenger EVs, not commercial EVs, and so have missed the biggest threat that EVs pose to fuel demand. 

The Bloomberg displacement numbers at for light EVs and buses. Other medium and heavy duty vehicles are still largely ignored. So if we start with displacement of about 300kb/d in 2018 and allow that to grow by 50%, we reach cumulative 3.4mb/d in 2024 and 5.1mb/d in 2025. The difference of 1.7mb/d will likely overwhelm any other growth in oil demand in that year. Thus, we may see oil demand enter structural decline as early as 2025. 

The point here is that it is critical not to undercount commercial EV. Looking only at impact of small EVs on gasoline demand, we'd only have an impact around 0.2mb/d in 2025, which would not be enough to arrest demand growth. But a 1.7mb/d impact is a very different story, and most of that story will be driven by falling demand for deisel.

This is a black swan in plain sight. 

The latest Bloomberg New Energy report shows that economics are driving the change, with the total cost of ownership of electric buses far outperforming the alternatives. The report says a 110 kWh battery e-bus coupled with the most expensive wireless charging reaches parity with a diesel bus on total cost of ownership at around 37,000 miles traveled per year. It estimates that about 500 barrels a day of diesel fuel will be replaced for every 1,000 battery-powered buses. 

In 2018, the volume of oil-based fuel demand that buses remove from the market may rise 37 % to 279,000 bpd. By 2040, this number could rise as high as 8 million bpd.
 

[TraderTate + 186]

the diesel displacement figures are scary. wonder what that means for Ford's new F150 ... and what's with the timing?

https://www.cnet.com/roadshow/news/ford-f150-diesel-power-stroke-ecoboost-comparison/

[Vlad Kovalenko + 115]

[Bharath + 12]

seems no one read tony seba's report on oil demand. goto Rethinx.com and see the report. commercial Autonomous EV's will cut 30 Million BD oil demand by 2030. this is very conservative figure i guess. Waymo releasing 20 k electric autonomoous cars in 2020, that will be equivalent to 200K regular cars and once remaining players enter the game the fall in oil demand is brutal. wait for 2020, the death is near for oil and middle east.

[BlackTortoise + 103]

Times change. Electric cars and light trucks, including hybrids, in the last year displaced only about 50,000 barrels a day of oil in a world that is using 100 million barrels a day for the first time this year. Maybe it seems to be small, but when combined with other trends, like fuel economy standards, the reduction in oil demand will start to add up and each year it will impact more and more. Electric vehicles are expected to be 30% of new car sales by 2040, up from 1% today. Just last year we had 2.8 million EVs on the road compared to 1.5 million oil fueled vehicles and we iot is expected to have 36 million EVs by 2025. 

Edited May 8, 2018 by BlackTortoise

[Guillaume Albasini + 851]

The growth rate of the EV market share is the real question. I think that many projections are underestimating the growth of EV.

The demand is high but manufacturers cant supply enough cars. Until now the offer was limited to few EV models but many more are coming into production and by 2025 with the decreasing price of batteries EV`'s will be more affordable than  internal combustion engine cars.

If you had this to the fact that electrical busses and trucks will also increase their market share oil could be sooner than expected  in oversupply