Wood Mackenzie has released its ‘Electric shock’ report, examining how three key forces — oil supply shocks, policy decisions, and technological innovation — could accelerate the growing share of electric vehicles (EVs) in the global vehicle market. The report says these forces could converge and “send EV adoption into overdrive, with implications for oil, power, and metals”.
The electric shock scenario outlines the potential for global oil demand to fall to 99 million barrels per day in 2040 under an accelerated EV growth environment. The authors note that neither metals nor electricity supply would be insurmountable obstacles to faster EV adoption. Around US$45 billion ($63.3 billion) in additional investment, particularly in copper supply, could support a 50% increase in global EV stock by 2040.
The base case for EVs through 2040
EV adoption continues to grow at different rates globally. In the first half of 2026, passenger EV sales were down 33% in the US compared with the same period in 2025, following the withdrawal of tax incentives.
In Europe, EV sales were up 30% over the same time period, while in China, EV market share grew from 33% in Q2 2025 to 42% in Q2 2026.
Wood Mackenzie’s base case projects continued growth, with EVs jumping from 4% of global passenger and commercial vehicles in 2025 to 25% in 2040.
In China, EVs have already reached purchase price parity with gasoline and diesel models, accelerating adoption across the market. By contrast, Wood Mackenzie’s base case projects that Europe will reach parity in 2030, with the US following in 2033.
China takes the lead
China’s EV industry is oversupplied, with production exceeding domestic sales by around 50% in 2025. Wood Mackenzie says greater government support is needed to further accelerate adoption, including additional restrictions on gasoline consumption, tax exemptions for EVs, and larger upfront sales credits.
Taking this decisive action would help to cut the total cost of EV ownership by about 30% in China, growing sales from 8.9 million in 2025 to 29.9 million in 2040.
Chinese EVs are gaining ground in emerging markets. In Mexico, sales of Chinese EVs grew from around 3,000 in 2023 to almost 80,000 in 2025, making up 6% of all car sales in Mexico.
In Europe, EVs made up just 3% of the continent’s vehicles in 2025. Wood Mackenzie’s base-case forecast brings that figure up to 35% by 2040, driven by price incentives and Europe’s emission reduction goals.
In the US, oil supply means that the country has less of an incentive to shift to EVs. Wood Mackenzie’s base case projects EVs rising from the current 3% market share to just 20% in 2040
EVs at an inflection point
Charging availability is a key consideration for consumers considering an EV. Wood Mackenzie notes that the world’s current 7 million public charging ports are able to absorb near-term EV growth.
“The five-year build-out of public charging has outpaced EV sales, leaving 15% utilisation across all major markets as of end 2025.”
To support the growth in EV sales as projected in Wood Mackenzie’s base case, China would need an additional 4 million ports by 2040, Europe would require an additional 2.7 million ports, and the US would need around 500,000 public ports.
To fuel EV sales, Wood Mackenzie highlights that governments can accelerate investment across EV supply chains, particularly to shield against shocks, such as those seen in the oil markets following conflict in the Middle East.
“High fuel prices … could be a turning point for consumers to switch to EVs to cut fuel costs,” the report says.
A step-change in technology can also accelerate adoption. The report highlights China’s continued progress in battery innovation, including five-minute charging, advanced lithium iron phosphate (LFP) batteries, and sodium-ion batteries.
Implications of EV uptake
Wood Mackenzie sets out three key implications for the global energy sector if EV sales meet the base-case forecast.
The report projects global oil demand at 104 million barrels per day, roughly around its current level, but the electric shock scenario outlines demand at 99 million barrels per day in 2040.
For critical minerals, Wood Mackenzie highlights the challenge of delivering additional supply, noting that around US$45 billion in new investment in key metals is needed over the next decade to grow greenfield capacity.
Copper is the most critical bottleneck. The report recommends that investment in higher-risk jurisdictions may be needed if established mining regions fail to streamline permitting and maintain competitive fiscal terms.
Lithium and nickel share copper’s struggles. As China maintains its global leadership in processing, refining, battery manufacturing, and vehicle production, the country is also expanding its upstream mining assets.
Securing critical minerals supply chains and the technological expertise in the battery space is now essential for the West. This will help it gain a strategic advantage, accelerate the energy transition, and grow the value streams that will lead to long-term resilience across energy, transport, and industrial markets.
Critical minerals projects in focus
Wood Mackenzie’s electric shock scenario underscores how oil supply shocks, policy decisions, and technological innovation could send EV adoption into overdrive, but only if metals supply keeps pace.
With copper, lithium, and nickel flagged as bottlenecks, the spotlight turns to explorers advancing projects across Australia and North America.
Lincoln Minerals (ASX:LML) is focused on drilling at the Minbrie Project on South Australia’s Eyre Peninsula, a region relatively underexplored for copper.
The company recently released assays from its aircore drilling program, confirming that the mineralisation at Eagle Ridge continues up dip, with alteration and mineralisation validating Lincoln’s geological model and supporting follow-up drilling planned for Q4.
Lincoln is advancing both established copper and base metal exploration at Minbrie as well as early-stage copper and gold exploration at the Southern Eyre Project, with additional focus on graphite, iron ore, and uranium.
On the lithium front, Lake Winn Resources (TSX-V:LWR) is developing the Little Nahanni Pegmatite Group (LNPG) Project in Canada’s Northwest Territories. A 10-hole drill program is planned for the northern autumn 2026.
The company has announced a potential name change to Northern Critical Minerals as it zeroes in on the LNPG Project, which provides exposure to lithium, tantalum, and tin.
Fathom Nickel (CSE:FNI) is focused on securing North American supply of critical minerals, with a strategic focus on the Gochager Lake Project in Saskatchewan, Canada.
The company identified two new nickel-copper-cobalt mineralised zones in June, with assays pending for nine holes drilled across 3,174m in its phase two drill program.
Gochager Lake is just one of three exploration projects the company holds in Saskatchewan. Fathom is focused on targeting magmatic nickel sulphide discoveries.
Explorers like Lincoln Minerals, Lake Winn Resources, and Fathom Nickel show how targeted drilling and project development today can underpin the copper, lithium, and nickel supply needed tomorrow. This reinforces Wood Mackenzie’s call for early investment in exploration projects, which is critical for growing supply and accelerating EV adoption.
Write to Amy Rotman at Mining.com.au
Images: Mining.com.au, Lincoln Minerals
