The Dawn of a New Era: Electric Vehicles Usher in the Decline of Oil Dependency

The COP28 climate conference is underway in Dubai, and there is plenty of hand-wringing about how slow the world is in reducing the consumption of fossil fuels to fight climate change. But one positive that delegates can point to is the growing fleet of electric vehicles worldwide that is already making a surprisingly big dent in demand.

Globally, EV sales are increasing and are on track to outpace even the most ambitious net-zero timelines by 2030, new research from RMI shows (in partnership with the Bezos Earth Fund). And because of their energy efficiency—as much as three times greater than ICE vehicles—EVs will need less to drive the same distance and will displace more oil.

The rapid growth in EV sales is partly due to the sharp drop in battery prices, as companies like Tesla and others compete to improve technology and increase production capacity. But it is also driven by various policies supporting them, including higher mileage standards and slashing in many countries’ excise taxes on gas and diesel cars.

And with a few exceptions, most EVs are cheaper than petrol and diesel cars when operating costs and purchase price are considered. Leading markets have already crossed a tipping point, where battery EVs cost less to own than an equivalent petrol or diesel car (EEIST research). This trend is expected to continue and accelerate as the market grows and economies of scale are gained.

However, there are barriers to overcome, especially regarding consumer adoption of EVs. Surveys show that the most significant obstacle is consumers’ reluctance to buy an EV because of concerns about recharging and battery life, among other factors. Governments can help address these concerns through incentives like the $7,500 U.S. tax credit that helps buyers offset hefty upfront costs and provide more public charging stations.

Cities can play a crucial role in increasing EV demand by focusing on the types of vehicles they have the most control over, such as municipal fleets and buses, and by mandating that taxis and ride-sharing services have zero emissions. By making these changes, cities can dramatically cut the need for new fossil fuels and set a strong example for other regions.

In addition, governments worldwide are adopting ambitious targets for EV production and sales, as reflected in the new Accelerating to Zero coalition. The commitments in this group of over 100 nations, along with the Paris Agreement, are a sign that international cooperation will have a critical role in accelerating the transition away from fossil fuels. But the most crucial step is for countries to adopt and implement the policies that will get us there sooner rather than later. That starts with a clear policy roadmap and ambitious targets. This is why the UAE, as host of COP28, has committed to a pathway for a decarbonized future that includes a de facto phase-out of fossil fuels by 2050.

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