Despite an expected increase in demand for transport as poorer economies become wealthier, BP expects that driverless vehicles will reduce the number of cars owned by individuals and they will be largely powered by electric engines.
The average electric car is expected to be driven about two and a half times more than an internal combustion car, according to BP's chief economist Spencer Dale.
"Cars will be used much more intensely over time," Dale said.
As a result, fuel demand from the world's car fleet is forecast to dip to 18.6 million barrels per day (bpd) in 2040 from 18.7 million bpd in 2016, when it represented around one fifth of total oil demand, according to BP.
BP forecasts a 100-fold growth in electric vehicles by 2040 and, unlike many other forecasts, including previous BP Energy Outlooks, which looked solely at the growing share of EVs in the car fleet, BP this year focused on the share of kilometres powered by electricity.
Under BP's Evolving Transition scenario, which assumes that policies and technology continue to evolve at a speed similar to that seen in the recent past, some 30 per cent of car kilometres are powered by electricity by 2040 from almost zero in 2016.
At the same time, the number of EVs is set to increase from three million today to over 320 million by 2040, representing roughly 15 per cent out of a total car fleet of two billion.
"What we expect to see in the 2030s is a huge growth in shared mobility autonomous cars ... Once you don't have to pay for a driver, the cost of taking one of those share mobility fleets services will fall by about 40 or 50 per cent," Dale said.
The vast majority of the shared mobility is expected to be EVs because of their lower maintenance costs.
BP sharply raised its estimate of growth in electric vehicles in the coming decades from last year's forecast that EVs would reach 100 million by 2035. The big upwards revision is due to an increase in hybrid cars and an expected sharp growth in EV purchases in the second half of the 2030s, Dale said.
Meanwhile, UK ministers have been warned that accidents involving driverless cars threaten to be a legal nightmare.
Labour peer Lord Campbell-Savours argued the complex issue of liability around the operation of autonomous vehicles would be a lawyer's dream.
The former MP was speaking during a second reading of the Automated and Electric Vehicles Bill in the House of Lords.
The draft legislation includes outlining improved access to charging points and when insurers are liable where an accident is caused by an automated vehicle.
But Lord Campbell-Savours said: "The whole approach to vehicle liability will turn into a legal nightmare. A lawyer's dream."
He highlighted a section of the Bill which stated the insurer or owner of an automated vehicle would not be liable for an accident where the person in charge at the time had allowed it "to begin driving itself when it was not appropriate to do so".
He said these words would prove very expensive "because the lawyers will make a mint out of it".
