Tesla’s Electric Cars Will Motivate New Market Participants, Cause Less Oil Consumption, Says Study

electric vehicles

by | Oct 3, 2016

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electric vehiclesIf Elon Musk is correct, Tesla’s active participation in not just the electric vehicle industry but also the whole energy storage development will spur more entrepreneurs to action. That’s a good thing, given that the market place is demanding cleaner cars and power production.

Focusing just on the electric vehicle segment, Wood Mackenzie is saying that the Tesla Model 3 — designed with ‘ordinary’ folks in mind — will help cut gasoline consumption by 300,000 barrels per day by 2035. “Is the Model 3 truly a disruptive force, signaling a possible electric car revolution?” the report asks, which has been published by GTM Research, a unit of Greentech Media.

As Musk has predicted, his company’s participation in this market is prompting other car makers to get in on the action. By 2035, Wood Mackenzie estimates that electric vehicles will be 12 percent of all new car sales, or 16 million vehicles. Such a base case scenario, it adds, would mean that the country consumes 5 percent less oil than today, or 350,000 barrels per day. Electric vehicle sales now make up less than 1 percent of the market.

“EVs would likely become a disruptive force in the oil industry before they do for the power industry, especially considering that much of the charging infrastructure is currently being built in areas affected by renewable over-generation, where additional demand would be welcomed,” said Prajit Ghosh, research director at Wood Mackenzie, as reported by Greentech Media.

Okay, so electric cars will reduce the demand for oil. But will they reduce overall pollution? It depends on how the electricity is generated. Coal-fired power plants are responsible for a third of all manmade carbon emissions. The vehicle sector represents 24 percent of that.

If the electric batteries that move cars are charged with coal-fired power, the results may not be impressive. If natural gas is used to fuel the electricity, the outcome is much improved. If wind, solar or hydro facilities are the primary source of electric power, the numbers are even better.

“As a result, some researchers suggest that a regional approach to clean vehicle standards makes more sense than national standards that effectively require electric cars across the board,” says a story in the Scientific American. For example, electrically-charged cars in California are cleaner than those that are electrically-fueled in Minnesota.

Source: Wood Mackenzie and GTM Research

Source: Wood Mackenzie and GTM Research

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