Global fossil fuel demand defies decline despite EV surge, reveals study

Despite the surging demand and sales for electric vehicles around the world, global demand for petrol and diesel is defying to decline, reveals a study by Morgan Stanley. The study has claimed that the dichotomy between the rise in electric vehicle purchases and increased oil demand is challenging conventional expectations around the world.

The report has stated that the global appetite for petrol and diesel is set to reach an all-time high in 2023, with sales of fossil fuels growing by nearly 40 per cent. It clearly says that despite the battery electric vehicle sales rising, which is expected to make up more than 10 per cent of global automobile sales, has not curbed the consumption of petrol and diesel around the world.

The study further revealed that Norway boasts the highest electric vehicle penetration rate globally. Despite electric vehicles constituting 80 per cent of the new passenger vehicle sales in the northern European country, oil demand in Norway has not collapsed. A similar trend has been observed in China as well, which is the largest electric vehicle market in the world. Oil demand in China has surged by 50 per cent alongside EV penetration reaching more than 20 per cent in the country, revealed the study. It has cited a projection by the International Energy Agency (IEA) stating that the petrochemical sector will be the primary driver of future oil demand.

The study has also stated that the unfolding transition into new energies takes decades. The new technologies take time to achieve dominance. Currently, fossil fuels like petrol and diesel account for more than 80 per cent of primary energy consumption in the transport sector, while solar and wind make up just over five per cent. The report stated that government policies around the world promoting a shift toward net-zero emissions and the adoption of cost-efficient renewable energies will alter this balance gradually.