Wood Mackenzie projects EV fleet share to hit 25% by 2040 after Hormuz shock
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Wood Mackenzie projects the global electric vehicle share of the passenger fleet to climb from 4% today to 25% by 2040, citing the oil price shock from the Strait of Hormuz crisis. The consultancy's 'electric shock' high-case scenario projects EV adoption 50% above the base case and global oil demand at 99 million barrels per day by 2040.
Key Facts
- Wood Mackenzie expects the EV share of the global passenger fleet to rise from 4% today to 25% by 2040 in its base-case scenario.
- The consultancy's 'electric shock' high case models EV adoption at 50% above the base case and global oil demand at 99 million barrels per day by 2040, some 5 million bpd below its base case.
- Wood Mackenzie projects that additional Chinese policy measures cut total EV ownership costs by about 30%, lifting annual sales from 8.9 million in 2025 to 29.9 million by 2040.
- Wood Mackenzie said the decelerated road transport fuel demand in the scenario would lead to early closure of about 40 oil refineries worldwide.
Electric Shock Scenario
Wood Mackenzie's high-case scenario, dubbed 'electric shock', models what happens when policy, consumer behaviour and technology move in the same direction. David Brown, Director of Energy Transition Research at Wood Mackenzie, said the effect on EV adoption would be significant if these forces converge at once. Under the scenario, global EV adoption accelerates to 50% above the consultancy's base case. Global oil demand in the scenario falls to about 99 million barrels per day by 2040, around 5 million bpd below the base case. Wood Mackenzie said the lower road transport fuel demand would lead to early closure of about 40 oil refineries worldwide.
China and the United States
Wood Mackenzie said additional Chinese policy measures, including new gasoline consumption restrictions, full purchase tax exemptions and larger purchase credits, would cut total EV ownership costs by about 30%. That would push annual EV sales in China from 8.9 million in 2025 to 29.9 million by 2040. The United States risks falling further behind if advanced battery technologies, competitive supply chains and targeted policy support for domestic manufacturing are not established. Wood Mackenzie also said challenges to accelerated adoption remain, including the need for billions of U.S. dollars in investments in critical battery minerals supply and charging networks. The consultancy said the longer the Strait of Hormuz crisis roils global fuel markets, the stronger the case for EV adoption becomes.
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Wood Mackenzie projects EV fleet share to hit 25% by 2040 after Hormuz shock
