So my basic criteria for disrupting the oil market is that enough EVs are added to the fleet in a year to offset consumption 1 mb/d, which is roughly how much consumption is expected rise each year. When EVs offset more than the growth opportunity, then consumption is declining. So roughly 25 typical ICE autos consume about 1 barrel of fuel per day, 42 gal * 22.5 mpg = 945 mile, divide by 25 cars is about 38 mi/d/car or 13.8k miles per year per car. You can play with avg mpg and mi/d and get back to about 25 cars consuming 1 barrel of fuel per day. Bloomberg also independently came up with the same ratio, but it's just a nice round number.
Here's what's messing with my head here: I figure the heaviest gasoline users -- the highest-mileage drivers, driving the largest and heaviest cars -- will actually switch first. The highest-mileage users have the best financial payback. The drivers of the largest and heaviest cars are in the highest price bracket and least sensitive to upfront price, *or* they're for-hire and very high mileage. Taxi and limo fleets, for instance -- many limo fleets have already concluded that switching to a Tesla is highly profitable for them. Displacing the heaviest fuel users first should accelerate the process more than if the average car was being replaced.
There is a question of whether the disruption criteria should be based on cumulative EVs in the global car parc, i.e. fleet, or the annual number.
Well, each car replaced causes a permanent displacement of oil demand every year, so if you're looking at total demand displacement seems much more logical to look at the cumulative displacement....
So if 25 cars displace one barrel of oil per day... this happens *for the entire lifetime of those cars*. They'll still be displacing oil in 10 years. We won't see electric cars replacing old electric cars for quite a while. At that point the cumulative EV count stops working quite as well.
I suppose if you're looking at percentage changes, however, the cars produced last year already caused their demand cut (even though that demand cut is sticking around). You want to hit the point where the demand cut each year exceeds the supply cut each year, so you want the *new* offset to exceed the 5%-6% decline rate of the oilfields. So you're comparing the derivative of total EVs on the road to the derivative of total oil supply.
You want 6% of the oil supply to equal the displacement from new EVs. Let oil supply in the year of crossover be B barrels/day. B *.06 is the number of barrels which must be displaced by new EVs that year. Using 25 cars == 1 barrel/day, B * .06 * 25 is the number of cars which must be produced that year. So B * 1.5. Currently 96 million barrels demand, so if it happened this year it would require 144 million cars per year. This is incorrect, though. First of all, it won't happen this year; it'll happen in a future year which may have lower oil supply.
Lower oil supply means that the crossover happens at a lower number of cars per year. I think this is important, because it shows a perhaps-unexpected interaction of peak supply and peak demand phenomena.
In about 6 years, the world oil supply should have declined to 66 million barrels based on the 6% decline rate; although there will be additional exploration, fracked wells and oil sands will decline *much* faster so this is probably an overestimate of oil supply. This would of course call for only 100 million electric cars per year.
I find about 550,000 EVs and plug-ins sold worldwide in 2015 (from insideevs). The thing I can't possibly estimate is the growth rate in production.
There was a global 61% growth rate, which I consider conservative looking forward. China seems to have had an over-200% growth rate. The number of Chinese companies putting out models and aiming for 50,000/year off the bat is large. Jose Pontes at ev-sales.blogspot.com thinks that Kandi and BAIC can match BYD, who are already outproducing Tesla. Several other Chinese companies are seriously trying, as well, with no less than *six* other Chinese companies outselling Tesla in China. The growth rates here are phenomenal.
If we look at batteries, we have Tesla/Panasonic, BYD, LG Chem/various, AESC/Nissan/Renault, Mitsubishi/GS Yuasa, Samsung/Various, Epower/?, Beijing Pride Power/?, Air Lithium/Kandi, Wanxiang/? . Obviously BYD is trying to grow as fast as Tesla/Panasonic. LG Chem seems to be limited by the recalcitrance of tus carmaker customers. The AESC partnership may be ending and Nissan may be throwing in with LG. I don't see much hope for the Mitsubshi partnership to expand. The Chinese companies at the bottom of the list, however, may attempt to expand as fast as BYD and Tesla: they know who their competition is.
Based on the top ten batterymakers, the car battery market grew up *74%* from 2014 to 2015.
OK, so here's another way to think about it. Each time the oil supply declines, it reduces the number of electric cars needed to displace the natural decline rates of the oil supply. The 6% decline rate is the moral equivalent of increasing the electric car supply by 6.38%, for the purposes of finding the crossover point. So add 6.38% (I'll use 6% to be conservative) to the projected growth rate of electric cars to figure out when we hit 144 million.
At a 61% growth rate, it takes 11 years. At a 74% growth rate, it takes 9 years. At a 150% growth rate, it takes only 6 years. At a 200% growth rate, it takes only 5 years.
So really, how fast we cross over is largely dependent on China. If China's growth rate of electric car production continues to accelerate, it'll be 5-6 years. If the world average growth rate continues, it'll be 9-11 years. If we slow down to a mere 50% growth rate and there is no decline in oil production, it could be 13 or 14 years.
This is why I feel safe in predicting the bankruptcy of the oil companies by 2030. The crossover point will definitely hit by then, and once it hits the oil price will drop through the floor, unless the decline rate of the oil fields is so much higher than 6% that they manage to lose an additional 20% of production (which will get them down to "non-automotive" levels of supply).
But if China's EV expansion really goes great guns, it could happen *much* quicker.
