Tesla is one of those modern day electric vehicle companies that does not rely on gasoline and thus is revolutionizing the way cars are made. According to the International Energy Agency, demand for gasoline will peak, and in the next 25 years, companies such as Tesla will rule the market, resulting in a demand growth halt for gasoline, reports Bloomberg.

Tesla Motors Inc Advent Will Result In Gasoline Demand Peaking
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IEA not as pessimistic as Royal Dutch

In an interview in London, IEA Executive Director Fatih Birol said electric cars are “happening” and that demand will surge from a tad above 1 million last year to more than 150 million by 2040. The cresting of gasoline demand indicates a rapid shift which is casting a shadow over an industry that usually forecasts decades of demand in the future. Previously, Royal Dutch Shell Plc took the world by surprise when it stated that demand for oil could peak in as little as five years from now.

However, IEA is not as pessimistic as Royal Dutch, as the agency said that overall oil demand will grow for the next several decades because of higher consumption of diesel, fuel oil and jet fuel by the shipping, trucking, aviation and petrochemical industries.

The projection was part of a broader analysis done by the IEA for its “World Energy Outlook 2016” flagship report. The report stated that demand will come down from 23 million barrels a day last year to 22.8 million barrels a day by 2020. By 2030, there will be a minor spike in demand, and it will peak at 23.1 million barrels a day before falling again in 2040, the organization projects.

Tesla-like cars to overshadow gasoline

Philip Verleger, president of the consulting firm PK Verleger LLC in Colorado, said that the IEA’s forecast for oil demand is one of the most optimistic outcomes for the global industry. He added that refiners around the world can only hope that this forecast turns out to be true because all other forecasts have indicated that demand will die as soon as 2020 rather than 2030.

Verleger explained, “It’s the best news a dying patient can hope to get.”

For decades, gasoline has been the most obvious choice for automobile manufacturers to fuel their vehicles. However, companies such as Tesla transformed the definition of an efficient and powerful car by producing powerful batteries that can power electric cars. Other traditional players such as General Motors, BMW AG and Nissan Motor Co are following suit.

The drop in demand for gasoline will have significant consequences on oil refinery companies because oil contributes one in four barrels worldwide, says Bloomberg.