Oil Majors Facing Electric Car Threat
Oil Majors Facing Electric Car Threat

Oil Majors Facing Electric Car Threat

Oil Majors Facing Electric Car Threat

Many carmakers, and not just Tesla, have been developing electric vehicles, betting on the expected continuous rise of battery-powered cars in the future. Now it’s not only carmakers that predict that EVs will make up a substantial part of new vehicle sales in a decade or two—oil majors are admitting it too.
France’s Total SA expects EVs to account for up to 30% of new car sales by 2030, which could lead to oil-based fuel demand peak in the 2030s, Total’s chief energy economist, Joel Couse says, World Oil reported.
Couse reckons that after 2030, fuel demand “will flatten out” and “maybe even decline”, in what Colin McKerracher, head of advanced transport analysis at Bloomberg New Energy Finance, described as the “most aggressive” projection by an oil major about the rise of EVs.
Other oil majors have their projections about peak oil demand as well, ranging anywhere from as early as the next decade, to nowhere in sight.
Germany’s Volkswagen AG plans to launch four affordable Volkswagen-branded EVs and an Audi EV crossover in the coming years. Premium carmaker Volvo said in mid-April that it would build its first fully electric car in China, which will be available for sale in 2019, and exported globally from there.
According to Frost & Sullivan, the global EV market is expected to grow by 25.6% to 950,000 sales this year. The 2017 launches of new EV models will be around 25, with Chevrolet Bolt and Tesla Model 3 being the most anticipated, Frost & Sullivan says. Incentives and subsidies, substantial investment by original equipment manufacturers, new entrants, and lower battery prices are driving the double-digit growth.
Still, challenges that manufacturers need to address include the lack of standard charging technology, the short-distance range, and lack of a fixed business model, according to Frost & Sullivan. The analysts’ underlying conclusion is that “continued incentives and subsidies will be crucial market drivers for growth.”
Shell’s chief executive Ben van Beurden said in March that oil demand could peak as early as in the next decade before demand starts to spiral downwards.
“We have to acknowledge that oil demand will peak, and it could already be in the next decade. It could happen. There are people who believe it will grow forever but I don’t subscribe to that,” van Beurden told the CERAWeek energy forum, as quoted by The Telegraph.
BP, in its Energy Outlook 2017, said that an extra 100 million battery EVs could lower oil demand by around 1.4 million bpd.

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