New Wood Mackenzie Report Says That Global Energy Insecurity Could Cause EV Surge

Released on August 17, 2026, Wood Mackenzie’s latest Horizons report suggests global EV adoption could accelerate significantly if geopolitical pressures, consumer behavior, government policy, and technological advances converge. The firm’s base case already projects EVs growing from 4% of the global vehicle fleet today to 25% by 2040.

Its “electric shock” scenario identifies three factors that could push EV sales well beyond that forecast. Governments could increase investment in EV supply chains to reduce exposure to oil market disruptions, higher fuel prices could encourage consumers to switch to EVs, and faster technological improvements could make electric vehicles more attractive.

If those factors occur simultaneously, Wood Mackenzie projects global oil demand could fall to 99 million barrels per day by 2040, 5 million barrels below its base case and roughly equal to current demand. The shift could potentially result in about 40 oil refineries closing earlier than expected.

China would remain the global EV leader. EVs accounted for 42% of Chinese car sales in Q2 2026, up from 33% a year earlier. Additional incentives and restrictions on gasoline consumption could reduce EV ownership costs by about 30%, potentially increasing annual Chinese EV sales from 8.9 million in 2025 to 29.9 million by 2040. Chinese manufacturing capacity could also increase 50% by 2035.

The United States faces greater risks. Passenger EV sales during the first five months of 2026 were down 33% year over year following the withdrawal of tax incentives, while EVs represent only 3% of the country’s vehicle fleet. Under Wood Mackenzie’s scenario, targeted policies and investment could bring EV total cost-of-ownership parity with gasoline vehicles forward to 2031. The U.S. EV fleet could then be 51% larger than the base case by 2040.

Europe could also accelerate adoption through a potential “grand bargain” involving tariff relief and Chinese investment in local manufacturing. That could make Europe’s EV fleet 53% larger than the base case by 2040.

Rapid EV growth would require major investment in minerals and charging infrastructure. Wood Mackenzie estimates an additional $45 billion in greenfield metals supply over the next decade, including about $25 billion for copper. Charging networks would also need significant expansion, while managed charging would become increasingly important for keeping electricity demand and costs under control.

The report demonstrates that EV adoption could move much faster than current forecasts if economic, political, and technological forces align.