WoodMac identifies three forces reshaping global EV and oil markets
A new analysis from Wood Mackenzie outlines how geopolitical shocks and technological shifts are accelerating electric vehicle adoption, with significant implications for energy and metals sectors by 2040.
A trio of emerging economic forces is poised to accelerate global electric vehicle production, fundamentally altering landscapes for oil, power, and metal markets, according to a report released by Wood Mackenzie on 13 August 2026. The consultancy identifies oil supply shocks stemming from conflicts in petroleum-producing nations, specifically Russia and Iran, as a primary catalyst driving governments to expedite investment in domestic supply chains.
High fuel prices are simultaneously prompting consumers to switch to electric vehicles, while rapid technological innovation continues to lower barriers to entry. The report notes that China is making significant strides in battery technology, including advancements in five-minute charging, sodium-ion batteries, and lithium iron phosphate cells. Western nations may need to increase licensing of Chinese technology to bolster resilience against oil price volatility and strengthen local supply chains.
Global oil demand is projected to fall to 99 million barrels per day by 2040, a decline from current levels above 100 million barrels per day. This shift is expected to vary by region, with the United States seeing its electric vehicle market share rise from 3 per cent today to 20 per cent by 2040, supported by abundant domestic oil supplies. In contrast, Europe, which maintains high dependence on oil imports, is forecast to see its electric vehicle share grow from 3 per cent in 2025 to 35 per cent by the end of the decade.
David Brown, a report author, warned that the United States faces a "tidal wave of EV innovation" from overseas. He stated that American policymakers must seriously fund new electric vehicle supply chains and manufacturing capabilities to remain competitive against imports and maintain a foothold in global markets.
While global mineral supplies could support a 50 per cent growth in electric vehicles by 2040, the report identifies copper as a critical bottleneck requiring substantial capital injection. The world needs an additional $45 billion in metals investment over the next decade to meet demand. Additionally, electric grids and regulators are urged to expand managed charging systems to shift vehicle charging to periods of ample power supply.
