MOMR September 2017
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World Oil Demand


OPEC Monthly Oil Market Report – September 2017

Electric vehicles – recent developments

In absolute numbers, the ratio of electric vehicles (EVs) in 2016 globally is still very small, with a share of

0.9% in the US, while in Europe EVs made up a total of around 1.5% of all new passenger car registrations

over the same period. Germany actually saw a decline in purely electric vehicle registrations in 2016 from a

year earlier, to average a share of 0.7% of total new car sales. New car registrations in Europe for 2016

have shown that diesel is still the most popular fuel among buyers of new cars, accounting for 49.9% of the

EU-15 market and gasoline’s market share grew to 45.8% from 43.5% a year earlier. In Asia, China showed

an impressive 500,000 new EV registrations in 2016. However, this still only amounts to 1.8% of total new

vehicle registrations.

Given the very low share of total passenger cars, worldwide sales of EVs were up by 42% in the year to

June 2017, according to data from,

with sales of plug-in EVs rising by 102,106 units in

June, the second-highest monthly volume on record. In the US, plug-in sales surged by 44.8% in the

12 months to June 2017 from a mere 4.4% in the same period a year earlier. The Tesla Model S, retained

the top spot for seven months to the end of July, while sales of the Chevrolet Bolt EV have been steadily

increasing. China remains the largest market for EVs globally, with an increase of 42% in the sale of plug-in

passenger cars in the first half of 2017 over the same period a year earlier. According to EV volumes, “new

energy” passenger car sales are growing 20 times faster than the Chinese car market as a whole, to reach

2.5% of total new sales.

From the point of view of the industry, several global automakers have recently announced that they will

intensify the development of hybrid and electric vehicles in an effort to further reduce carbon emissions. In

the summer of 2017, BMW announced that in 2019 it will begin producing a version of its popular Mini that

will run solely on battery power. This was followed by a startling declaration by Swedish automaker Volvo,

owned by Chinese automotive giant Geely, to introduce five all-electric car models between 2019 and 2021

and build the rest of its hereto solely gasoline and diesel-driven cars with hybrid engines. In addition, Ford

Motor signed a memorandum of understanding with China’s Anhui Zotye Automobile in August 2017 to

explore the establishment of a joint venture for the development, production, marketing and servicing of a

new line of all-electric passenger vehicles in China. VW has also announced that it plans to invest

$10 billion over the next five years in electric vehicles. However, the company also plans to spend

$22 billion over the same time period to develop more efficient internal combustion engines (ICE).

Furthermore, San Francisco transportation company Uber has just announced the creation of a “clean air

fund” in the amount of GBP150 million for the city of London in order to support its drivers to switch to hybrid

and electric vehicles in an effort to phase out diesel cars from its ride-hailing service. Uber aims to be hybrid

or electric by 2019 and fully electric by 2025 in the UK capital. Uber currently has a fleet of 40,000 cars and

3 million users in London.

In the second week of September China’s Vice Minister of Industry announced that the country was looking

to ban the production and sale of diesel and gasoline cars and vans. There was no mention of a date for the

ban to come into force, but he said that the "relevant research" was being undertaken. China produced

some 28 million cars last year, almost a third of the global total. This follows earlier statements by

government officials in the UK and France to ban new gasoline and diesel cars in their countries by 2040, as

part of efforts to reduce pollution and carbon emissions.

Meanwhile, on the other side of the Atlantic, the US President’s budget proposal for 2018 called for slashing

funding to the Environmental Protection Agency’s budget by 31%, or $ 2.6 billion, and the discontinuation of

the Clean Power Plan (CPP), which is instrumental for the US to live up to its carbon emission reduction

promises under the Paris Agreement. In addition, the current renegotiation talks on the NAFTA Agreement

include returning a minimum percentage of American automobiles to be produced in the US as the

automobile sector accounts for the largest share of the US trade deficit with Mexico. Whether the US is

likely to join the other nations in their drive towards electric vehicles remains to be seen.