The popular claim that a surge in electric cars will hasten the arrival of peak oil demand is undermined by the data. The majority of the world’s cars will remain powered by petrol, also commonly known as gasoline, for at least the next two decades and this will drive oil demand, according to data from Facts Global Energy. With the number of passenger vehicles expected to grow to 1.8bn by 2040, the energy consultancy estimates only 10 per cent will be accounted for by electric cars and a further 20 per cent by hybrids. This might sound contentious given the hype around Tesla, the flag-bearer of electric vehicle producers, and many analysts forecasting a structural decline in oil consumption. But most research simplifies the matter, suggesting that falling battery prices are tightly correlated with electric car sales. The reality is more complex. The shift towards electric has to be supported by significant government incentives. Norway, for example, owes its success to the hundreds of millions of dollars in tax revenues diverted towards subsidies making it almost free to drive an electric car. Today it is normal for a Norwegian to buy an electric car in addition to a petrol vehicle for daily use to save money. Without such a subsidy, sales would fall, as demonstrated in Denmark last year. When the incentive was dropped in January 2016, electric car sales plunged 80 per cent from the previous year. Battery technology is improving but not as fast as necessary. Even at the $150/kWh — considered widely as the level to trigger mass production — a battery pack for an electric car with a comparable range to that of a petrol-powered car would cost tens of thousands of dollars. Cost aside, the improvement in battery effectiveness as measured by energy density is also slow. It is not possible to quickly increase the amount of distance travelled unless you add more batteries to a car, which means more weight and, in turn, a reduction in how far you can go. The love affair with the sport utility vehicles, partly driven by low oil prices, remains a problem. Last year, Ford sold six F-series light trucks in the US for every plug-in vehicle, providing solid petrol demand for the years to come. Even in China, one in every three cars sold is an SUV. With relatively low oil prices for at least the next decade, in FGE’s view, this trend will continue. Production capacity is another obstacle. Despite impressive annual growth rates, total electric car production was less than 500,000 in 2016, compared with global light vehicle production capacity of more than 70m. Tesla put just 80,000 cars on the road in 2016. Mass electrification of global road transport will not be possible without large-scale involvement from the main car manufacturers. A case in point is the Nissan Leaf, now one of the world’s bestselling and affordable electric cars. Since its launch six years ago, cumulative sales of the Leaf amounted to just 250,000. While its parent group sold almost 10m vehicles last year, less than 1 per cent were electric. Global car production grew approximately 2m units a year over the past decade. Even if battery electric vehicle production were to grow at this rate for the next two decades, their share in the total fleet would remain limited. The fate of petrol demand — and oil for that matter — will not be set in the west but in Asia, which is only at the start of mass motorisation. Asia accounts for approximately one-third of the global light vehicle fleet of 1.1bn. FGE expects growth in the region over the next 25 years of more than 500m units, more than the growth in rest of the world combined. By 2040, almost every other car in the world will be driven in Asia. Even with the most generous electrification assumptions, it is hard to see a “peak” in petrol demand followed by a subsequent drop. A more likely scenario is it continues to grow for decades to come.