Big Oil Waking Up to Threat of Electric Cars

The world’s top automakers have a combined plan to sell  6 million EVs a year by 2025.The world’s top automakers have a combined plan to sell  6 million EVs a year by 2025.

The world’s biggest oil producers are starting to take electric vehicles seriously as a long-term threat.

OPEC quintupled its forecast for sales of plug-in EVs and oil producers from Exxon Mobil to BP also revised up their outlooks in the past year, according to a study by Bloomberg New Energy Finance released on Friday.

The London-based research body expects those cars to reduce 8 million barrels of oil demand by 2040, more than the current combined production of Iran and Iraq.

The growing popularity of EVs increases the risk that oil demand will stagnate in the decades ahead, raising questions about the more than $700 billion a year that is flowing into fossil-fuel industries.

While the oil producers’ outlook is not nearly as aggressive as BNEF’s, the numbers indicate an acceleration in the number of EVs likely to be in the global fleet.

“The number of EVs on the road will have major implications for automakers, oil companies, electric utilities and others,” Colin McKerracher, the head of advanced-transport analysis at BNEF in London, wrote in a note.

“There is significant disagreement on how fast adoption will be and views are changing quickly.”

BNEF expects electric cars to outsell gasoline and diesel models by 2040, reflecting a rapid decline in the cost of lithium-ion battery units that store power for the vehicles. It expects 530 million plug-in cars on the road by 2040, a third of worldwide total number of cars.

The Organization of Petroleum Exporting Countries raised its 2040 EV fleet prediction to 266 million from the 46 million it anticipated a year ago.

Battery cars under the new projection account for 12% of the market within 23 years, compared to 2% in the 2015 forecast. Based in Vienna, the group representing 14 nations expects half the number of diesel vehicles it did a year ago.

The world’s top automakers have a combined plan to sell 6 million EVs a year by 2025, rising to 8 million in 2030, according to Bloomberg.

Just a fraction of the world’s cars sold today are powered by batteries instead of gasoline. Many analysts increasingly say the market will expand rapidly, as almost all major automakers bring dozens of new EV models to market.


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