Electric Vehicles Still Run on Oil

Global oil demand is at all-time highs, and growing at a faster rate than pre-pandemic. This is despite major inroads by electric vehicles in China, the world’s fastest-growing mobility market. China continues to subsidize all vehicles, including internal combustion. Growth in sale of pure battery electric vehicles is stalling. The fastest-growing sector is the extended-range electric vehicle, with an internal combustion engine that acts as a generator to recharge the battery that powers the electric drivetrain. Gasoline continues to be an essential partner in electric vehicle proliferation. Forecasters other than OPEC, and TrendMacro, are calling for oil demand lower than today’s by 2030. We think demand will continue to grow. We reiterate our forecast for a price range of $60 to $80 Brent.