While there seems to be a belief that electric vehicles (EV) will soon take over highways and road ways globally, a recent study cautions against this theory.

Yes, there are some distinct advantages to widespread EVs such as cleaner air, faster acceleration, avoidance of gas stations, lack of noise and government incentives. But there are some major concerns about a complete shift from internal combustion vehicles such as battery life, battery expense, range and lack of infrastructure. Maybe the biggest misconception is about how much oil consumption will go down around the world when EVs take over.

A study by Marianne Kah, an adjunct senior research scholar and advisory board member at Columbia University Center on Global Energy Policy, attempts to shed light on the impact electric vehicles will have on oil demand. The conclusion of her report, even after narrowing it down to the projections of 15 unidentified forecasters, is there is no clear path to knowing what impact EVs will have globally in the future.

The only real consensus in the report, “Electric Vehicles and Their Impact on Oil Demand: Why Forecasts Differ,” is we won’t really see any major movement in the EV industry until 2030 at the earliest.

“Everyone agrees that nothing is going to happen very quickly in terms of the impact in oil demand,” Kah told Hart Energy. “Then when you get to 2030 you start to see a wide diversion in views.

“One could say that either penetration of EV takes off or it doesn’t. If it takes off obviously it will have an impact in the end, but if it doesn’t it has a very small impact. And that’s what you see in the forecasts. So there is large uncertainty whether EV will really take off. None of these studies really take the consumer into consideration.”

But the variables that are taken into consideration are the costs of electric vehicles, the current prohibitive cost of batteries to power EV, the belief that soon population growth will either slow or stagnate and doubts about the penetration of EV.

According to the study, the passenger vehicle sector in 2016 represented only one-quarter, or 27%, of oil demand. That equates to about 25 million barrels per day (MMbbl/d) out of an estimated demand of 94 MMbbl/d.

For some countries that are mandating the conversion to EV, the impact on oil demand may not be that great so there has to be other motivators. China, for instance, has been the most aggressive about pushing electric vehicles.

The Chinese government sees the mandated conversion as a chance to set industrial policy, according to Kah.

“They see themselves as becoming the biggest manufacturer of batteries and electric vehicles in the world,” she said. “So that’s probably their No. 1 priority.

“But obviously they also have energy security concerns because they have to import oil. They also have balance and trade concerns since they have to import oil. Clean air is another huge driver there in the city. And probably a fourth motivator but probably the least of them is reducing greenhouse gas emissions.”

Currently, it doesn’t seem that the movement to EV would help China reduce its greenhouse gas emissions because 70% of its electric power comes from coal. But the International Energy Agency forecasts that by 2040 only 40% of China’s electric power will be generated by coal.

“And there it’s certainly an energy savings because electricity is more efficient than the internal combustion engine,” Kah said. “The other aspect of going to electrification is that it is lower costs and easier to decarbonize the power sector than the transportation sector.”

Still a major concern is battery costs, according to Kah’s study. The problem for consumers is the battery costs today are over $200 per kilowatt hour, which is why EV sales have remained modest despite government incentives.

In order for EV to be economically competitive with a gasoline-powered car the battery costs would have to come down to about $100 per kilowatt hour. Once there, over a period of time it will be economically advantageous for consumers to spend more on the front-end for an EV because crude oil would have to drop to $35/bbl to stay competitive.

“It’s come down quite a bit,” said Kah, who was the chief economist for ConocoPhillips for 25 years before coming over to Columbia University. “A few years ago they were $1,000 per kilowatt hour. They dropped so much that each increment of improvement is harder to get.

“But the consensus view is between 2025 and 2030 just from scaling up battery production you are probably going to get there.”

Even still, there seems to be little consensus that EV will become a thing globally, outside of countries where the conversion will be mandated as part of policy.

The goals of cleaner air and less oil demand will be offset by the higher front-end costs, battery life and the availability of charging stations.

“In some cases it clearly won’t achieve the goals,” Kah said. “I looked at a country like India that has a relatively unreliable power supply versus what we have here. How are they going to electrify? And they are one of the country’s that has one of these banning fossil fuel goals by 2030.

“I think there is a lot of hype going on about electric vehicles and it probably won’t happen to the extent that you see the publicity about it. What we see is that government policy is driving it, battery costs are coming down so something will happen in this space. The U.S. may not be where it happens. Europe and China are much more likely.”

Therefore, the conclusion at this point is mass overwhelming uncertainty about the benefits of EV and its impact on oil demand because the forecasters can’t agree.

“There is a big range of views,” Kah said. “To get the most extreme outcomes you would have to believe that we are on the two-degree carbon trajectory. I know there are a lot of people who believe that, but certainly we are not on it now. Even you were to go along with the Paris Agreement you still wouldn’t be on it. So there is a huge stretch to get to the more extreme outcome.

“The other conclusion is nothing is likely to happen soon because of how many years it takes to turn over the vehicle fleet.”

Terrance Harris can be reached at tharris@hartengery.com