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(ShareCast News) - Rapid improvements in battery technology are making electric vehicles (EVs) increasingly popular and casting a significant shadow over prospects for future oil demand, a major credit agency has warned.Fitch Ratings warned that a further leap forward in battery technology would make electric vehicles a genuine alternative to the internal combustion engine, which would cause disruption "across sectors that account for nearly a quarter of all outstanding corporate bonds".A further major shift up in battery technology would be "resoundingly credit negative" for energy companies, as transport accounts for 55% of oil consumption, Fitch said on Tuesday in the first in a series of its 'Disruptive Technology' reports that examine potential consequences of a dramatic acceleration in various technologies.Falling demand for transport fuel as EV demand rises could bring forward the expected 'peak demand' for oil.A report earlier this month from the World Energy Council warned that global demand for oil -- for transport fuel, heating and electricity -- will peak in the coming decade and half, due to technological innovation such as EVs, government policies and lower growth expectations.Fitch said: "A market with structurally falling demand will be a lot more risky for all oil companies, with long periods of low prices and investment uncertainty, as demonstrated by the current slump in oil prices."However, even if battery technology does advance swiftly, there remain barriers to a rapid shifts in demand, such as the relative lack of electric infrastructure and longevity of current vehicles.With electric vehicle specialist Tesla joining the ranks of traditional manufacturers that have begun to make increasingly proportion of electric vehicles, Fitch calculated that with a 32.5% compound annual growth rate in EV sales it would be nearly 20 years before EVs comprised a quarter of the global car fleet.Numbers of electric cars numbered just 1.2m last year but a surge in demand is forecast to see the proportion soar to a quarter of the world's automobiles by 2040, while oil industry specialists Wood Mackenzie have calculated that the rise of EVs could see demand for US gasoline fall by 20% over the next two decades.Fitch said it was important for oil companies to "react early" and many had already taken initial steps such as diversifying into batteries or renewables or focusing more on natural gas.As an example of this, French energy giant Total earlier this year made a bid for Saft to expand its interests in sustainable energy and electricity. London-listed companies developing battery technologies, alternatives power solutions or mining for lithium for batteries include ITM Power, Versarien, Proton Power, Ilika, Rare Earth Minerals and European Metals Holdings.