Oil market upheaval could make EVs a more attractive alternative to petrol and diesel cars, accelerating adoption far beyond current forecasts, reports Wood Mackenzie.

EVs currently account for around 4% of the global vehicle fleet. The consultancy’s base case puts that share at 25% by 2040. Under its accelerated scenario, however, Europe’s EV fleet could be 53% larger than expected, while the US fleet could be 51% larger.

Policy will also shape EV uptake in the UK, where the government is reviewing the Zero Emission Vehicle (ZEV) Mandate earlier than planned. It is considering lower annual sales targets but says the 2030 phase-out of new petrol and diesel cars and the 2035 zero-emission deadline will not change. Charging manufacturers warn that weaker targets could delay investment and reduce the flexible capacity available to the electricity system.

Wood Mackenzie describes this as its ‘electric shock’ scenario rather than its central forecast. The scenario assumes persistently high fuel prices will persuade more consumers to switch. Governments concerned about oil security would also increase their support for EVs as battery technology improves.

If those conditions align, global oil demand would stand at 99mn b/d in 2040. This is 5mn b/d below the base case and roughly level with current demand. The consultancy says this could lead to the early closure of around 40 refineries.

Faster adoption would also increase demand for battery materials. Wood Mackenzie estimates that an additional $45bn would need to be invested in greenfield metals supply over the next decade. Of this, $25bn would be needed for copper. Annual additions to copper mining capacity would have to rise from their long-term average of 850,000t to around 960,000t.

How this acceleration would play out varies by market, reflecting how far each has already progressed on EV adoption, according to Wood Mackenzie.

China already leads the global EV market. Electric models accounted for 42% of Chinese car sales in 2Q2026, up from 33% a year earlier. Under the electric shock scenario, annual sales could rise from 8.9mn in 2025 to 29.9mn by 2040. Supporting that growth would require another 4 million public charging points, costing around $200bn, says Wood Mackenzie.

The US market has recently lost ground. Passenger EV sales fell by 33% during the first five months of 2026 following the withdrawal of tax incentives. Targeted support could bring cost parity with petrol vehicles forward to 2031, two years earlier than expected, suggests the market analyst.

Europe faces pressure to protect its car industry after around 60,000 job cuts were announced in 2026. Wood Mackenzie’s electric shock scenario assumes tariff relief would encourage Chinese investment in local manufacturing. Faster adoption would require 2.7 million additional public charging points beyond the base case, costing around $108bn.

Delivering that expansion will depend partly on stable policies that give EV and charging companies confidence to invest. The UK government is now considering a central part of its own approach.

A 10-week consultation on the Zero Emission Vehicle (ZEV) Mandate opened on 14 August, bringing forward a review that was due by 2027. Responses close on 23 October.

The mandate sets the proportion of each manufacturer’s new registrations that must be zero emission. Existing targets require 33% of cars and 24% of vans in 2026, rising to 80% for cars and 70% for vans by 2030. Manufacturers can also hit targets through schemes such as credit trading.

The review considers lower trajectories from 2027. Its most far-reaching option would reduce the 2030 car target to 50% and the van target to 40%. Less severe reductions are also proposed, alongside an option that keeps the current targets but extends credit trading and similar schemes to 2034.

Ministers say the options would not change the commitment to phase out sales of new cars powered solely by petrol or diesel in 2030 or require all new car and van sales to be zero emission by 2035. Electrical manufacturers’ trade body BEAMA warns that reducing the 2030 car target to 50% could delay up to £1.56bn of home charger sales and installations.

Its modelling estimates that 2.7 million fewer zero-emission cars would be sold between 2027 and 2035, leaving up to 1.7 million fewer home charge points installed by 2034.

The weaker trajectory could also leave the electricity system with up to 12GW less flexible charging capacity. This would make it harder to use EV charging to balance supply and demand as more renewable generation connects to the grid, says BEAMA.