Demand for gasoline in Asia may peak much earlier than expected as millions of people in China and India buy electric vehicles over the next decade.
Change is being prompted by policy moves in India and China, where governments are trying to rein in rampant pollution, cut oil imports, and compete for a slice of the fast-growing green car market.
In its “road map”, released in April, China said it wants alternative fuel vehicles to account for at least one-fifth of the 35 million annual vehicle sales projected by 2025.
India is considering even more radical action, with an influential government think-tank drafting plans in support of electrifying all vehicles in the country by 2032, according to government and industry sources interviewed by Reuters late last week.
“We will see a clear shift to electric cars. It’s driven by legislation so electric cars are coming, it’s not a niche anymore,” Wilco Stark, vice president for strategy and product planning at German car maker Daimler (DAIGn.DE), told Reuters.
Daimler sees electric vehicles contributing 15-20% of its overall sales by 2025 and at least an additional 10% of sales coming from hybrids.
Electric cars currently make up less than 2% of the global car fleet, and any faster-than-expected growth in that percentage will materially impact oil demand and the refining business.
“Technology is moving fast. In 10-15 years… our gasoline market might not be the same as it is today,” says Dawood Nassif, board director at the state-owned oil company Bahrain Petroleum Company (BAPCO).
Footnote: China currently sells more than 2 million new cars a month and is challenging the United States as the world’s biggest oil consumer. India now is the world’s third-biggest oil importer, ahead of Japan, reports Reuter.
