Electric Vehicles to Cut Global Oil Demand by Over 5 Million Barrels a Day by 2030, IEA Reports

Electric vehicles (EVs) are projected to displace more than 5 million barrels of oil per day by 2030, according to a new report from the International Energy Agency (IEA). The shift marks a major milestone in the global energy transition, with China expected to account for half of the oil demand reduction due to its dominance in EV sales, battery production, and manufacturing.

Global EV sales surged past 17 million units in 2024 — a sharp rise from the previous year and nearly matching the size of the entire market just four years ago. The momentum is expected to continue, with 2025 sales forecasted to exceed 20 million, representing over 25% of all new car sales worldwide.

Saudi Arabia, as part of its Vision 2030 economic diversification strategy, is also embracing the EV revolution. The Kingdom aims for 30% of all vehicles in Riyadh to be electric by the end of the decade. The Public Investment Fund (PIF) has invested over $10 billion in U.S.-based Lucid Motors, which recently opened a manufacturing facility in King Abdullah Economic City. In addition, the launch of Saudi Arabia’s own EV brand, Ceer — developed in collaboration with Taiwan’s Foxconn — aims to produce 500,000 EVs annually by 2030.

The IEA report notes that the reduction in oil use is being driven by the rapid electrification of both light-duty vehicles and heavy trucks. In China, electric truck sales doubled in 2024 to 75,000 units, capturing more than 80% of the global market. Battery-powered trucks are increasingly becoming cost-competitive with diesel models, especially for local and regional use.

Europe and Southeast Asia are also seeing robust EV adoption, with the former expected to reach nearly 60% EV market share by 2030, driven by stringent emissions regulations. Southeast Asia, led by Thailand and Vietnam, is experiencing fast growth thanks to policy incentives and emerging local production capacity. Meanwhile, the U.S. trails behind, with EVs projected to make up just 20% of new car sales by 2030, hindered by policy uncertainty and higher vehicle costs.

Emerging markets in Latin America and Africa are showing strong momentum. Brazil’s EV sales more than doubled in 2024 to 125,000 vehicles, while African markets such as Egypt and Morocco are starting to see traction.

Battery prices have continued to decline, particularly in China where costs dropped 30% in 2024. This has helped close the price gap between EVs and internal combustion engine vehicles in several countries. In Thailand and Brazil, EVs are approaching price parity, boosting affordability and adoption.

As countries worldwide ramp up EV production and infrastructure, trade policies and tariffs — especially targeting Chinese exports — may influence future market dynamics. Still, the IEA concludes that EVs remain a cost-effective and strategic solution for energy security, even with lower oil prices.