Demand for road transport is rising rapidly. By 2050, kilometres travelled by passenger cars are estimated to be 70% higher than today, according to the ETC. Total kilometres driven rises at a rate of 2% annually, with emerging markets, including India, Thailand and Brazil, leading the fastest growth, according to Ember’s 2025 report The EV leapfrog – how emerging markets are driving a global EV boom.

Efficiency has already counterbalanced rising energy demand from driving. New fossil-fuelled vehicles sold today are around 25% more efficient than those sold 15 years ago.

However, the biggest efficiency opportunity lies in transitioning from fossil combustion to electric cars. Electrification can sustain rising mobility demand, while reducing dependence on imported fuels and lowering the lifetime cost of car ownership. Through electrification, travel demand can rise by 70% by 2050, as energy inputs fall by 80%.

Electrification delivers structural efficiency
Electric vehicles (EVs) are fundamentally more efficient than fossil combustion engines. Internal combustion engines (ICEs) convert only 20–30% of fuel inputs into motion; the rest escapes as heat. In contrast, an EV converts 75–90% of battery energy into movement and recovers some energy during braking.

Petrol and diesel cars can become marginally more efficient with lighter designs, speciality tyres and hybrid powertrains. In theory, these improvements could increase efficiency by up to 50%, the ETC estimates. But even hybrid cars retain much of the mechanical complexity and fuel dependence of combustion systems and are unlikely to match the efficiency or economics of battery-electric vehicles.

At scale, that difference transforms road transport energy demand. The ETC estimates a fully petrol and diesel passenger fleet in 2050 would require roughly 19,000 TWh of final energy (fuel inputs after conversion losses). A fully electric fleet would need less than a third of that to travel the same distance. Each kilowatt-hour saved compounds across millions of vehicles.

Further efficiency gains are achievable with EVs when electricity comes from low-carbon sources instead of fossil fuels. Thermodynamics limit the efficiency of coal and gas power plants; they lose around 40–65% of energy in conversion to electricity, while over 90% of solar and wind energy converts directly into electricity through photovoltaic (PV) panels and turbines. Electrification links the transport and power sectors closer than ever.

Transport electrification should be treated as core infrastructure planning by the energy sector. Renewable generation needs to expand in parallel with charging demand, alongside reinforcement of transmission and distribution networks in cities and freight corridors. Permitting for fast-charging infrastructure should be streamlined, with clear connection standards and predictable revenue frameworks. Managed well, electrification lowers total system costs; managed poorly, it simply relocates congestion from roads to substations. Improving vehicle efficiency shapes how large this electricity system needs to become, and the long-term costs of running the car.

China’s scale sets the benchmark
China has deliberately prioritised production of highly efficient EVs at scale. Scale, in turn, reinforced cost reductions and innovation. In China, EVs are cheaper upfront than ICEs, and as a result, over 50% of new passenger car sales are now electric, Ember reports.

China’s policies helped to shape industry development targets by rewarding energy performance with fuel economy standards and EV subsidies structured to favour lighter, lower-energy models. In 2019, China’s New Energy Vehicle subsidy qualified for EVs that met maximum energy consumption thresholds of 13–15 kWh per 100 km. This helped to drive fleet-average electricity consumption to 12.1 kWh per 100 km by 2021, against a government 2025 target of 12 kWh per 100 km – noting that the smaller, lighter electric vehicles in China deliver lower average efficiencies compared to the global average.

China has treated road transport electrification as a system transformation rather than a simple product substitution. Vehicle manufacturing, battery supply chains, charging infrastructure and power sector expansion have progressed in parallel. This recognises the role EVs can play in supporting electricity system efficiency, acting as distributed batteries – storing electricity when supply is abundant and feeding power back to the grid during peak demand. This flexibility can be achieved with coordinated time-of-use tariffs, automated demand response and vehicle-to-grid systems. Managing peak electricity demand reduces overall grid investment needs.

China’s rapid EV growth is shaping the pace of global adoption. Chinese manufacturers are already scaling production and expanding exports. While this expansion helps to lower EV costs globally and accelerate the shift away from fossil-fuel vehicles, some countries have concerns about the competitiveness of domestic industries and potential supply-chain dependence. Several countries have been placing restrictions on their imports despite the cost opportunity.

A balanced response to this duality should recognise two realities. First, rapid and affordable electrification can enhance energy security by reducing reliance on fossil fuel imports and building flexible electricity. Second, domestic automotive industries face legitimate competitiveness challenges. The pragmatic response is neither blanket protectionism nor passive openness. Governments can welcome Chinese investment in local manufacturing through joint ventures, local content rules, workforce training and R&D commitments, so that production, jobs and capability are built domestically. At the same time, clear trade rules, transparency on subsidies and resilience requirements for critical minerals and batteries can address concerns about concentration and market distortion. The objective should be to combine speed of electrification with industrial resilience.

China’s rapid EV growth is shaping the pace of global adoption.

Driving greater value, with less energy inputs
Demand for road transport will continue to grow, but energy demand does not need to grow with it. EVs offer a structural improvement in energy efficiency and emissions reductions. Cleaner grids, better vehicle design and faster fleet turnover determine how much of that potential is realised. For energy companies, transport electrification demands accelerated grid decarbonisation and building charging infrastructure. For automakers, competitive advantage will hinge on efficiency, affordability and scale. China has demonstrated the power of sustained policy and industrial coordination. And in the end, the winning economies will be those who move more people and goods while using far less energy.

Note: This opinion is based partly on the Energy Transition Commission’s 2025 report The road ahead: electrification, design and mobility for efficient transport.

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.

• Further reading: ‘UK government launches new EV campaign’. The UK Department for Transport has launched a public opinion campaign to encourage the adoption of electric vehicles by highlighting financial incentives and operational savings.
• ‘Powering the future: the need for smarter grid connections for EV charging’. As the UK decarbonises its transport network, it shifts the source of energy for vehicle propulsion from fossil fuel supply chains to the electricity grid. Find out why stations with batteries and on-site power generation are needed at scale for rolling out electric vehicle charging. What opportunities and challenges lie ahead?