🛵 The Surprising Triumph of Two-Wheelers in Reducing Oil Demand

How e-bikes, e-mopeds and e-rickshaws are rolling past electric cars in decarbonizing transport

Hey there 👋

We use a lot of oil. Over 100 million barrels per day in 2023. Enough to fill up almost 6,500 olympic swimming pools. If these pools would be placed in a line it would stretch 318km and take almost 4.5 days for an ironman athlete to swim, if they could maintain their average race pace for a distance that is 81.5 times longer than an ironman swim.

Unlike ironman athletes, that are fueled by energy gels and bananas, large parts of our worldly activities are fueled by oil. Globally, private cars and vans accounted for more than 25% of oil use in 2022, with motor vehicles as a whole guzzling up almost half of all oil in wealthy countries (OECD member countries). Urban mobility across the world is largely driven by the car, pun intended. In Germany 70% of urban trips, regardless of whether it is a work day or not, are done by private car, and even in the cycling obsessed Netherlands, 62% of urban trips are taken in a car.

Electric cars have long been heralded as the silver bullet to reduce our exorbitant quantities of oil consumption and as a result tailpipe emissions, but while electric vehicles as a whole did displace almost 2 million barrels a day of oil demand in 2023 (2% of global oil demand), electric cars themselves were not the biggest contributors. The number one spot goes to electric two and three wheelers, which contributed 60% of the 2 million barrels per day displacement.

Today, there are almost 300 million electric 2 and 3 wheelers on our roads, with India and China riding at the forefront. In India, about half of rickshaws are electric and in China 80% of 2 wheelers are electric. Falling battery prices, increases in battery density and government regulation (China banned the sale of non-electric scooters in 2011) pave the way for for small electric vehicles to continue to contribute to reducing oil demand in a significant way.

Startups across the world will play a key role in enabling this growth through better technologies, new business models and increasing accessibility. CTVC one of the most popular climate startup newsletters covered $1.4B worth of funding rounds for small EVs in the past year. The funding went to 29 startups across 13 countries. Indian startups raised $1B and startups from other emerging countries raised almost $200M. A majority of the funding went to electric moped manufacturers like 🇮🇳 Ola Electric, which raised $842M. Funding did also flow to startups tackling other aspects, like 🇮🇳 OTO a financing platform, 🇮🇩 SWAP a network of battery swapping stations for e-mopeds, or 🇫🇷 Upway a marketplace for reconditioned e-bikes.

Electric bikes were first patented back in the 1890s but they never quite took off. Maybe now is the time that electric two and three wheelers really take off. They require far less resources to build than electric cars and are perfectly suited for the relatively short distances that most of us travel in cities. We should all learn from India and China. And if it rains, wear better clothes or just take public transport, if possible.

Until next time, much love,

Pascal Vilhelmsson 🖤

P.s. it would mean the world to me if you share this post with just 1 person

Photo by Norbert Levajsics on Unsplash. Drawing by me.