Sunday, September 26

Electric vehicles in emerging countries will end the era of oil

China spends up to 1.5% of its gross domestic product (GDP) on importing oil.

China spends up to 1.5% of its gross domestic product (GDP) on importing oil.

Emerging countries, with China at the helm, they are already leading the green transition to electric vehicles, which will cause a sharp drop in demand for crude oil and end the “age of oil.”

This is indicated by a study published this Friday by the “Carbon Tracker” laboratory of ideas, which calculates that this change in model could generate in those markets annual savings of up to $ 250 billion In 2030, the increase in global demand for crude could be 70% lower than expected.

Under current conditions, this work estimates that more than 80% of the growth in global oil demand until 2030 will come from the needs of the transport sector in emerging countries, while around half of that percentage corresponds to China and India.

However, Carbon Tracker recalls that both are drastically reducing your dependence on crude oil and they strongly promote electric vehicles (EVs), whose prices are already approaching those of diesel and gasoline engines.

In this sense, China is now a world leader in the development of EVs, a strategy that India is also following, the report notes.

“This is a simple choice between increasing dependence on what has been expensive oil produced by a foreign cartel and domestic electricity produced from renewable sources whose prices are progressively falling. Emerging market importers will end the age of oil.” Kingsmill Bond, lead author of the study, explains in a statement.

Most governments in the markets of China, India, Southeast Asia and almost all of Africa have “strong incentives” to “electrify their transportation systems”, since 68% of their crude imports go to this sector each year.

China, for example, spends up to 1.5% of its gross domestic product (GDP) in importing oil, while for India it is 2.6%.

Bond points out that with the aforementioned savings of 250,000 million dollars per year, these countries could finance, “more than enough”, the infrastructure necessary to electrify their transport systems.

Along with the economic benefits are those of public health, since pollution from road transport causes 285,000 deaths a year in these emerging markets, of which 114,000 occur in China and 74,000 in India, according to figures from the International Transport Council Cleansed.

Among the factors that are facilitating this green transition is also the cheaper electric batteries, whose prices have fallen 20% since 2010.

Carbon Tracker foresees that, “in the next few years”, its price will fall from 135 dollars per kilowatt hour (KWh) to 100 dollars per KWh, which will equal the cost of buying a conventional vehicle to that of an electric one, while these they would already be even cheaper in 2030.

By then, the analyst firm BloombergNEF, according to the study, forecasts an electric battery price of 61 dollars per KWh and the manufacturers Volkswagen or Tesla place it at 50 dollars per KWh.

“A shift to EVs in emerging markets it would cause oil importers to reduce global demand growth by more than 70%. And if we consider that the war on plastics will affect petrochemicals and increase the penetration of EVs in developed markets, we may already peak oil demand in 2019, “says Bond.

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