Oil field (Image: Flickr user johnny choura, used under CC license)Enlarge Photo
As electric cars become more widespread, they have the potential to drastically reduce the need for oil.
That will lead to reduced transportation-related carbon emissions and lower costs for consumers, but what effect will it have on the oil industry?
This question has sparked a bit of debate among analysts.
Last month, Bloomberg published an article with the provocative title "Here's How Electric Cars Will cause the Next Oil Crisis," forecasting doom for the oil industry.
It predicted that falling battery prices will lead to mass adoption of electric cars over the next decade, and that by 2040, long-range electric cars will cost less than $22,000 (in today's dollars).
This will lead to an "oil crisis" in which prices crash due to a major surplus.
2016 BMW i3Enlarge Photo
But that isn't going to happen, according to Navigant Research, which published a blog post rebutting many points in the Bloomberg article.
Navigant says it largely agrees with Bloomberg's projections for greater electric-car sales, and that electric cars displace oil.
Between January 2011 and December 2014, U.S. electric cars displaced 2.1 million barrels, according to the research firm's own estimates.
However, Bloomberg's focus on electric cars "betrays a lack of comprehensive understanding on other trends in the automotive industry," that may have more of an impact, Navigant contends.
It claims the "biggest omission" by Bloomberg is fuel economy of internal-combustion cars and trucks.
Lyft car with trademark pink mustache (via Wikimedia)Enlarge Photo
To achieve the same 2.1-million barrel displacement witnessed between 2011 and 2014, new-car fuel economy would have to improve by just 0.08 percent in four years, the research firm claims.
That's relatively insignificant compared to the efficiency increases already mandated by U.S. Corporate Average Fuel Economy (CAFE) standards.
CAFE calls for a roughly 22 percent increase in average fuel economy by 2025.
Bloomberg should have also considered autonomous cars, which analysts believe will yield further efficiency improvements, says Navigant.
And there's the possibility that the availability of car-sharing and ride-sharing services will lead to a major decline in vehicle ownership.
Nissan autonomous vehicle prototypeEnlarge Photo
Overall, Navigant claims to agree with Bloomberg that larger numbers of electric cars may soon hit U.S. roads.
But it takes issue with the way Bloomberg appears to single out electric cars as the main cause of a potential oil-price crash.