Electric vehicles endanger oil refineries and shift energy needs

Wood Mackenzie expects that the rapid shift toward electric vehicles, driven by oil price shocks, technological changes, and government policies, could reduce global oil demand from 104 million barrels per day to 99 million barrels by 2040. This decline might lead to the closure of around 40 oil refineries worldwide, particularly in OECD countries that are affected by rising energy costs and carbon prices. Additionally, the transition highlights the increased need for investments in key minerals such as copper and lithium and positions China as a major player in manufacturing and exporting electric vehicles, with projections indicating that electric vehicles’ global market share will grow from 4% in 2025 to 25% in 2040. This growth is expected to be accelerated by rising sales and cost parity with traditional cars in some markets by the late 2020s.

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